In theoretical models of residential sorting, a household’s location decision is closely tied to its demand for consuming local public services. School choice programs typically weaken the link between residential location and schooling options. Computable general equilibrium models suggest large general equilibrium effects from expanded school choice, but there is limited empirical evidence concerning whether these effects occur. This paper develops and empirically tests predictions concerning the general equilibrium effects of inter-district choice programs. We examine changes in school district-level demographics and housing values between the 1990 and 2000 Censuses, when twenty-six states adopted these choice programs. Our empirical analysis uses a triple-differences style approach, with varying intensity of treatment across districts within the same adopting states. Consistent with theory, districts with popular nearby, out-of-district schooling options experience relatively large increases in housing values and in the number of households with children.
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