Matthew Davis
The Wharton School
University of Pennsylvania
3620 Locust Walk, Suite 3000
Philadelphia, PA 19104
E-Mail: 
Institutional Affiliation: University of Pennsylvania
NBER Working Papers and Publications
December 2017 | Housing Disease and Public School Finances
with Fernando V. Ferreira: w24140
Median expenditure per student in U.S. public schools grew 41% in real terms from 1990 to 2009. We propose a new mechanism to explain part of this increase: housing disease, a fiscal externality from local housing markets in which unexpected booms generate extra revenues that schools administrators have incentives to spend, independent of local preferences for provision of public goods. We establish the importance of housing disease by: (i) assembling a novel microdata set containing the universe of housing transactions for a large sample of school districts; and (ii) using the timelines of school district housing booms to disentangle the effects of housing disease from reverse causality and changes in household composition. We estimate housing price elasticities of per-pupil expenditur... |
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