Win or Lose: Residential Sorting After a School Choice Lottery

Abstract

We examine residential relocation and opting out of the public school system in response to school choice lottery outcomes. We show that rising kindergarten and sixth graders who lose a school choice lottery are 6 percentage points more likely to exit the district or change neighborhood schools (20-30% increase) and make up 0.14-0.35 standard deviations in average school test scores between lottery assignment and attendance the following year. Using hedonic-based estimates of land prices, we estimate that lottery losers pay a 9-11% housing price premium for access to a school with a one standard deviation higher mean test score.