We reexamine the relationship between school quality and house prices and find it to be nonlinear. Unlike most studies … in the literature, we find that the price premium parents must pay to buy a house associated with a better school … increases as school quality increases. This is true even after controlling for neighborhood characteristics, such as the racial …

Observable measures of public school quality provide noisy signals of underlying quality to parents. Accordingly, this … paper examines the house price effects of school quality and quality uncertainty. Residential bid rent theory under this … type of uncertainty shows that greater school quality increases housing prices and steepens the gradient whereas quality …