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This research investigates how social climate information from schools impacts housing prices and buyer decisions.

August 1, 2026American Economic Journal Economic Policy0 citations

The Value of School Social Climate Information: Evidence from Chicago Housing Transactions

Key Points

This research investigates how social climate information from schools impacts housing prices and buyer decisions.
Analyzed Chicago school information shock using border discontinuities and event studies.
Applied difference-in-differences designs to assess price changes for homes linked to schools with varied climate ratings.
Explored reactions of higher-income households to school climate disclosures.
Homes associated with schools having better climate ratings saw price increases, indicating significant price capitalization.
A secondary information disclosure led to smaller price increases but notable interest from higher-income families.
The findings suggest families highly value the quality of school climate when making housing decisions.

Abstract

Educational institutions increasingly measure and publish indicators of social climate. I exploit a plausibly exogenous shock of Chicago school information to examine how social climate information is capitalized into housing markets and affects homebuyer sorting. Using border discontinuities, event studies, and difference-in-differences designs, I find public disclosure raises prices for homes assigned to schools with better climate ratings, with suggestive evidence that higher-income families sort into these homes. A second, less publicized disclosure produced weaker price capitalization but significant responses among higher-income households, suggesting differences in access to information. The findings provide revealed-preference evidence that families value school climate quality. (JEL D83, H75, I21, I28, J13, J45, J81)

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