How much is a neighborhood school worth?

This paper presents evidence of the effect on house values of a school redistricting in Shaker Heights, Ohio in 1987. As a result of redistricting, neighborhood schools are disrupted, bus transportation is introduced, and school racial composition changes. The data include all arms-length sales of houses in Shaker Heights between 1983 and 1994. We find, using a difference-in-difference estimator, that disruption of neighborhood schools reduces house values by 9.9%, or $5738 at the mean house value. This result is robust to a variety of alternative specifications, including repeat-sales analysis and within-neighborhood analysis. (C) 2000 Academic Press.