The Effect of Housing Wealth on College Choice Evidence from the Housing Boom

We use NLSY97 data to examine how home price variation affects the quality of postsecondary schools students attend. We find a $10,000 increase in housing wealth increases the likelihood of public flagship university enrollment relative to nonflagship enrollment by 2.0 percent and decreases the relative probability of attending a community college by 1.6 percent. These effects are driven by lower-income families, predominantly by altering student application decisions. We also find home price changes affect direct quality measures of institutions students attend. Furthermore, for lower-income students, each $10,000 increase in home prices leads to a 1.8 percent increase in the likelihood of completing college.