The Public Release of Value-Added Scores Does Not (Yet) Impact Real Estate

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As per ScienceDaily, a resource “for the latest research news,” research just conducted by economists at Michigan State and Cornell evidences that “New school-evaluation method fails to affect housing prices.” See also a press release about this study on Michigan State’s website here, and see what I believe is a pre-publication version of the full study here.

As asserted in both pieces, the study recently published in the Journal of Urban Economics, is the first to examine how the public release of such data is considered in housing prices. Researchers, more specifically, examined whether and to what extent the (very controversial) public release of teachers’ VAM data by the Los Angeles Times impacted housing prices in Los Angeles. To read a prior post on this release, click here.

While for some time now we have known from similar research studies, conducted throughout the pre-VAM era, that students’ test scores are correlated with (or cause) rises in housing prices, these researchers evidenced that, thus far, the same does not (yet) seem to be true in the case of VAMs. That is, the public consumption of publicly available value-added data, at least in Los Angeles, does not (yet) seem to be correlated with or causing really anything in the housing market.

“The implication: Either people don’t value the popular new measures or they don’t fully understand them.” Perhaps another implication is that it is just (unfortunately) a matter of time. I write this in consideration of the fact that while researchers included data from more than 63,000 home sales as per the Los Angeles County Assessor’s Office, they did so in only the eight-month period following the public release of the VAM data. True effects might be lagged; hence, readers might interpret these results as preliminary, for now.

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