Date of Award

6-2014

Document Type

Open Access

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Stephen Schmidt

Language

English

Keywords

district, prices, schools, spending, wealth

Abstract

Public schools are often criticized for the way in which they elect to distribute their limited resources. Perhaps the most critical assets for schools are teachers and administrators, and the compensation of these individuals varies widely amongst public school districts. There exists an optimal level of spending on district administration. Districts that pay administrators above or below this optimal point are likely not allocating their resources in the best possible manner, and educational quality may suffer. We hypothesize that within districts where either of the above situations is the case, home prices will be lower, as homebuyers will be less willing to pay for homes within a district where the schools do not function efficiently and allot taxpayer dollars well. Using boundary discontinuity methods, we find a district's amount of administrative spending per pupil, to be highly significant and inversely related to district house prices. We also find a significant inverse relation between a district's level of non-administrative spending per pupil and home values, and a significant positive correlation between a district's level of wealth and house prices. Thus, based upon its valuation by homebuyers, we conclude that school spending within Capital District schools is currently above its optimum point. Additionally, we find the significance of district size, student-to teacher ratio and test scores, to district house prices, to vary by specification, and do not find race or teacher salaries to be significant.

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