When researching where to buy a home, families want more than just an agent’s or neighbor’s recommendation that local schools are “good.” New research announced today (July 12, 2006) suggests they look for positive proof of school district quality.

Authors of a study that examined more than 77,000 real estate transactions conducted in Ohio during Year 2000 have concluded that when evaluating school districts, homebuyers look at the end result of education – overall test scores – rather than how well schools do in improving students. They also claim that significant increases in student scores on state proficiency exams help boost home sale prices.

The study of Ohio school districts showed that an increase of about 20 percentage points in the proficiency test “pass rate” increased house values in a district about 7 percent, even after taking into account other factors that impact house values.

Economics professors Donald Haurin of Ohio State University and David Brasington of Louisiana State University conducted the study and published its results in a recent issue of the Journal of Regional Science. They correlated house prices in 310 different Ohio public school districts with the percentage of students passing all parts of the 4th and 9th grade stste proficiency tests administered in the same districts.

“You can’t look only at proficiency test scores as an outcome and say that is a measure of school quality,” Haurin contends. “But that’s what homebuyers in our study did when they were looking for houses.” Because the emphasis on test scores has a resulting impact on housing prices, he said, "that means school boards need to pay attention to outcomes too."

One problem for school districts is that how they help students improve – what the study refers to as a "value-added approach" to education – is difficult for researchers to measure and difficult for the public to understand. Proficiency test scores, on the other hand, are readily available and easy to understand. That makes them more influential with the public, Haurin said.