HOW MUCH MORE IS A GOOD SCHOOL DISTRICT WORTH?

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Abstract
This paper infers the value of public schools from sale prices of houses in neighborhoods in which public services are delivered by overlapping jurisdictions to isolate the effects of the public school from other local government services. We use information about houses that sold between 1976 and 1994 to decompose the difference in mean house value into a part due to differences in observable characteristics and an unobservable part due to differences in public services. We infer differences across jurisdictions in the value of local public schools under a variety of assumptions about the degree of tax and service capitalization.