School District Consolidation, Student Performance, and Housing Values

Abstract

School district consolidation is often purported to save taxpayers money. However, the current study shows that doubling the size of a school lowers student proficiency passage rates by 1%. In turn, this lowers the average house price by $400. This represents 30% of the total loss in house value due to consolidation. Therefore, regardless of cost savings, homeowners' property values fall, and thus the tax base is likely to contract due to a school district merger. Unlike previous studies, both building and district size measures are used to analyze the effect of size on proficiency test passage and graduation rates.