The value of school choice opportunities

In this paper, we study the house price effects of local school choice opportunities among public primary schools using a rare and large-scale reform that abolished binding catchment areas in North Rhine-Westphalia, the largest German state with 18 million inhabitants. To estimate the reform’s effect on valuations of houses, we compare houses with different local school choice sets, before and after the reform. We find that gaining access to a school within 2,000 meters and with a higher transition rate to the academic track (relative to the initial neighborhood school) increases house prices by 1.5 percent. This effect is larger when the more attractive school is closer and diminishes as distance grows. The full reform effect materializes roughly five years after reform onset. • We study the effect of school choice options when catchment areas disappear. • Using highly localized choice sets allows to control for prior sorting. • Comparing choice opportunities we find house price effects of 1.5 percent for improved choice. • Results suggest that effects are larger for closer, more attractive schools.