The House/School Treadmill

Robert Frank says the positional nature of school quality helped fuel the housing boom, making it difficult for families to borrow responsibly when purchasing a home:

But what works for any individual family does not work for society as a whole. The problem is that a "good" school is a relative concept: It is one that is better than other schools in the same area. When we all bid for houses in better school districts, we merely bid up the prices of those houses.[...]

The result was a painful dilemma for any family determined not to borrow beyond its means. No one would fault a middle-income family for aspiring to send its children to schools of at least average quality. (How could a family aspire to less?) But if a family stood by while others exploited more liberal credit terms, it would consign its children to below-average schools. Even financially conservative families might have reluctantly concluded that their best option was to borrow up.

I don't think it makes sense to view the quality of local public schools as a pure positional good (there would be a real difference between a society where the graduates of even the worst high school all had basic reading and math skills and the society we actually live in) but there clearly is some positional component here and I think Frank's analysis explains at least some of what we've seen.

Comments

So would it follow that if schooling wasn't determined by where you live then some portion of the housing crisis could have been avoided? Would you endorse the idea that the logical progression of this theory would be that school vouchers would help to avoid another housing crisis?

Posted by Bull E. Vard | April 27, 2008 5:02 PM

> The problem is that a "good" school is
> a relative concept: It is one that is
> better than other schools in the same area.

Ah..... no. In every metro area there are some districts where the schools are clearly superior (New Trier School District in the north Chicago suburbs for example). When you are looking for a house you know right off the bat whether or not you can afford those districts. If not, there is a huge swath of areas (in Chicago a gigantic swath of suburban, exurban, and even some City neighborhoods) where the schools are "good enough". That is where you look because you also have to follow the "don't fall in love with one house" negotiating strategy.

And that doesn't even take into account the tendency of people to get absorbed into the school district where they live and defend it as "very good" regardless of its absolute quality. If your kids and their friends go there it must be good.

Cranky

Posted by Cranky Observer | April 27, 2008 5:05 PM

"... I think Frank's analysis explains at least some of what we've seen."

I don't think so. School districts are not uniform. Even "good" school districts have houses of various quality. These will cost more than the same house in a "bad" school district but there will be considerable overlap, so for example a bad house in a good district might cost the same as an average house in an average district or a good house in a bad district. So the quality of the school district is just a another factor like number of bedrooms, lot size, commuting distance etc to tradeoff while considering what house to buy. It provides no special justification for spending beyond your means.

This crisis was driven mostly by stupid lending. Once you start massive lending to people with inadequate income and collateral, disaster is inevitable. Perhaps there should be minimum margin requirements for house loans as there are for stock loans.

Posted by James B. Shearer | April 27, 2008 5:10 PM

It's long been true that homes in towns with good schools (i.e., towns with the demographics to supply the raw materials for good schools) are worth more than schools in other towns, but that wasn't the prime driver of the real estate bubble. The prime driver was speculation, driven by greedy and dishonest borrowers and lenders. I doubt all the towns in the Inland Empire of California, South Florida, and the exurbs of Phoenix -- places where the bubble was most inflated -- had great schools.

Posted by Fred | April 27, 2008 5:15 PM

It would've been awfully nice if columnist Frank had bothered to offer even one shred of tangible evidence to support his thesis.

Oh, wait--he did allude to an also-rather-conjectural-sounding book, published four years ago. Well, I guess columnists can't be expected to work too hard, especially on weekends.

Posted by James Gary | April 27, 2008 5:15 PM

I've been following social science statistics since 1972. Here's a summary by Leon Todd of Harvard sociologist Christopher Jencks' big 1972 meta-analysis of the impact of education:

"A review by Leon Todd on Amazon.com summarizes some of Jencks' 1972 findings:
"… it is probably wiser to define a "good" school in terms of student body characteristics than in terms of its budget or school resources. According to Jencks, once a good school starts taking in "undesirable" students (the definition of desirable sometimes pertains to academic, social, or economic attributes), its academic standing automatically declines. He concluded that while an elementary schools' social composition had only a moderate effect on student's cognitive achievement, secondary or high school social composition had a significant effect on achievement. … The type of friends students are likely to make, the values they are exposed to, and satisfaction or dissatisfaction with the school, are all dependent upon the character of the student body. "

Posted by Steve Sailer | April 27, 2008 5:19 PM

If this was a factor at all, I think it is so minor relative to other factors so as not to rate a serious mention. Brad De Long has an excellent piece today which I think deals with the much more significant causes (the body of which was written by Rodger Lowenstien, but the strong conclusions by de Long):
http://delong.typepad.com/sdj/2008/04/roger-lowenstei.html

Possibly the best piece on this issue I've seen. Walks step by step through the internals at Moody's.

Posted by Domino | April 27, 2008 5:21 PM

Although, I just recalled that de Long's piece mentions that nearly all of the sub prime mortgages in the Subprime XYZ group at Moody's were in the same post code, so maybe there's more to Frank's point than I first gave credit?

Posted by Domino | April 27, 2008 5:24 PM

A better school for Junior is a fine aspiration, but I wonder how much of this really relates to a better education or whether it is just another status symbol or justification for over-buying in many cases. Don't jump on my case, now, I'm not saying this is the case for everyone but this post reminded me of this story I came across a couple of days ago.

The article was about how difficult SUV owners are finding it to trade in their vehicles and get a "fair" price. To wit:

David Tivadar has spent three months trying to get fair trade-in value for his 2005 Lexus SUV, which gets about 17 miles per gallon. He would like to trade it in for a minivan that gets better mileage and can accommodate his baby daughter.
...... How big is that baby, anyway?

An SUV isn't big enough for baby. ROTFLMAO.

Posted by Figbash | April 27, 2008 5:25 PM

Barack Obama cites approvingly the 2003 book "The Two Income Trap" in his "Audacity of Hope." The mother and daughter team of Harvard Law professor Elizabeth Warren and former McKinsey consultant Amelia Warren Tyagi explain in the Two Income Trap:

"The average two-income family earns far more today than did the single-breadwinner family of a generation ago. And yet, once they have paid the mortgage, the car payments, the taxes, the health insurance, and the day-care bills, today's dual-income families have less discretionary—and less money to put away for a rainy day—than the single-income family of a generation ago."

The two authors note:

"The brunt of the price increases has fallen on families with children. Data from the Federal Reserve show that the median home value for the average childless individual increased by 23 percent between 1983 and 1998 … (adjusted for inflation). For married couples with children, however, housing prices shot up 79 percent—more than three times faster."

Many economists shrug that this vast rise in prices increases Americans' net worth. "But that net worth isn't worth anything," the two women point out, "unless a family plans to sell its home and live in a cave, because the next house the family buys would carry a similarly outrageous price tag."

Further, this housing cost rise transfers hundreds of billions of dollars of wealth from young families to aged empty-nesters—which probably isn't the most sensible way to run a society if the welfare of the next generation is a high priority.

Warren and Tyagi made an impressive survey of 2200 families that declared bankruptcy. "Our study showed that married couples with children are more than twice as likely to file for bankruptcy as their childless counterparts," they write. This will come as no surprise to married couples with children. Even more striking: "This year more people will declare themselves bankrupt than will suffer a heart attack."

The biggest single cause of this growing financial stress on middle-income parents: the breakdown of much of the public education system. As Warren and Tyagi note,

"Even as millions of mothers marched into the workforce, savings declined, and not, as we will show, because families were frittering away their paychecks on toys for themselves or their children. Instead, families were swept up in a bidding war, competing furiously with one another for their most important possession: a house in a decent school district… "

Warren and Tyagi report: "A study conducted in Fresno … found that, for similar homes, school quality was the single most important determinant of neighborhood prices …"

They go on to say:

“Bad schools impose indirect—but huge—costs on millions of middle-class families. In their desperate rush to save their children from failing schools, families are literally spending themselves into bankruptcy."

Posted by Steve Sailer | April 27, 2008 5:25 PM

The Obama family finances 1996-2004, before they struck it rich in 2005 on books and Michelle's giant raise and bought a mansion, make an interesting case study in the financial pressures on an upper middle class family who, for purposes of Obama's political career, had to live in a lousy school district.

Even though they averaged well over $200,000 per year in income during those nine years, they appear to have been barely breaking even. Obama reports he had a terrible time at the 2000 Democratic convention renting a car with his credit card. They don't seem to have been able to save much. For example, Obama didn't start putting his lavish book-writing money in a tax-sheltered SEP until 2007, despite making $3 million or so in the previous two years.

Michelle has talked about the costs of what Sherman McCoy's friend in "Bonfire of the Vanities" calls the first requirement of raising a family in the city "insulation, insulation, insulation." She says they spend $10k per year on tutoring and lessons for their two kids, on top of the tuition at one of Chicago three most exclusive private schools.

Most young Chicago parents in their financial situation would have moved to an upscale suburb such as Wilmette, paid a big property tax bill, and in return received a wonderful array of school and recreational services for their children in a pre-insulated social environment with the children of other people who could afford to live in Wilmette. But Barack had to live for political purposes in his district, so they had to spend a fortune a la carte on privately insulating their children.

Posted by Steve Sailer | April 27, 2008 5:40 PM

"so they had to spend a fortune a la carte on privately insulating their children."

Sort of like Matt Yglesias's father shelling out for Dalton to keep Matt out of the local NYC public school.

Posted by Fred | April 27, 2008 5:51 PM

The housing bubble had two components. There has been a long term trend toward parents paying more for homes in school districts insulated from the kind of students they don't want their children around. And then in 2005, the final phase of the bubble started with the expansion of mortgages to a much lower class of borrower.

The latter made no economic sense at all because America isn't getting more equal, isn't developing a more productive working class, wages aren't going up, and so forth and so on.

Posted by Steve Sailer | April 27, 2008 5:51 PM

Considering that people have been selecting homes based on school quality for decades, it's dumb to cite it has a factor in the housing boom. There are a number of other phenomena that it might cause, but it's got nothing to do with booms.

Posted by Helter | April 27, 2008 5:52 PM

The subprime bubble of 2005-2006 was a ridiculous extrapolation of the long term trend toward families paying ever more for housing, giving liar loan mortgages to people who couldn't possibly pay them off if prices didn't keep going up. But the reason so many people assumed housing prices would go up forever was the long term upward trend that has been driven in part by this insulate, insulate, insulate desire.

Posted by Steve Sailer | April 27, 2008 6:01 PM

There's a need for a lot more analysis here. Helter might be right, or (s)he might be wrong. It's conceivable that the increasingly "meritocratic" structure of class in America has made yuppie parents more anxious about school quality than ever before, so that positional goods drive competition more forcefully than ever before.

But even if that were true, Frank's analysis would be a bit too clever to be useful. Sure, school quality is largely a positional good. But so is house quality tout court, in a country where houses are as large as they are in the US. In fact, the truth is that a whole heck of a lot of American consumption is driven by strictly positional competition, and has been since before Thorstein Veblen.

So this ain't exactly breaking news.

Posted by Ted | April 27, 2008 6:03 PM

No Child Left Behind mandates that children going to bad schools, schools that don't meet certain criteria, are allowed to transfer to better schools. But when that happens, their test scores do not increase.

I think that evidence suggests that good schools are good to the extent that they have good students. It's all sorting. The same appears to be true for college: GRE scores and income after graduation depend almost entirely on student characteristics, rather than school attended.

The people who spend big money on a house in a 'good' school district are apparently just wasting their money. But then, people don't have much sense.

Posted by gcochran | April 27, 2008 6:05 PM

The problem with Franks' theory is that there are lots of 'positional' goods, there is always competition for them, and one assumes that the market price for a home includes all that and always has. The difference in recent times, as noted above by others, was widespread dishonesty from borrowers, lenders, brokers, regulators, raters,... well, from just about everybody, actually.

Posted by MattF | April 27, 2008 6:42 PM

Most young Chicago parents in their financial situation would have moved to an upscale suburb such as Wilmette, paid a big property tax bill, and in return received a wonderful array of school and recreational services for their children in a pre-insulated social environment with the children of other people who could afford to live in Wilmette

...or not, for upper middle class African American parents who may want to insulate their child from being the only black kid in the class for twelve years.

Posted by southsider | April 27, 2008 6:46 PM

I am very skeptical, both because looking for good schools is nothing new, and because private schools should put a constraint on how much people would be likely to overpay for a house just because of good public schools (and you usually get hit twice for overpaying on a house just to get good public schools, meaning both in your mortgage and in your property taxes).

Posted by DTM | April 27, 2008 7:32 PM

"The people who spend big money on a house in a 'good' school district are apparently just wasting their money. But then, people don't have much sense."

Dr. Cochran,

Considering that the towns with 'good' schools also tend to be the ones with safe schools and neighborhoods, maybe people have more sense than you give them credit for.

Posted by Fred | April 27, 2008 7:39 PM

The problem with Frank's theory is that there are lots of 'positional' goods, there is always competition for them, and one assumes that the market price for a home includes all that and always has. The difference in recent times, as noted above by others, was widespread dishonesty from borrowers, lenders, brokers, regulators, raters,... well, from just about everybody, actually.

Ex-f***ing-actly. MattF wins the thread.

If only columnists would submit their theses to this sort of analysis before publishing them, there would be a lot less anecdotal BS floating around the memeosphere.

Posted by Ted | April 27, 2008 7:56 PM

> Most young Chicago parents in their financial
> situation would have moved to an upscale suburb
> such as Wilmette, paid a big property tax bill,
> and in return received a wonderful array of school
> and recreational services for their children in a
> pre-insulated social environment with the children
> of other people who could afford to live in
> Wilmette.

Unless you place value on diversity and _not_ allowing your children to grow up in an "insulated" environment. Since the real world they will deal with is diverse and absolutely not "insulated" and getting moreso daily.

Cranky

Posted by Cranky Observer | April 27, 2008 8:14 PM

Woah, there's plenty of academic evidence for the phenomenon Frank is talking about. I remember learning about in college 15 years ago. It was in my public finance textbook. Not the bubble part, but the hedonics estimation of school quality aspect. You know, an extra bathroom adds $X to the value of the house, good schools add $Y, etc.

In Seattle the school quality (test scores, at least) is pretty much exactly matched by house costs.

Posted by Chris | April 27, 2008 8:43 PM

> In Seattle the school quality (test scores,
> at least) is pretty much exactly matched by
> house costs.

As my then 3 y.o., standing in front of the hatching exhibit at the Museum of Science and Industry with his head swinging back and forth, said, "Chicks? Eggs? Chicks? Eggs? .... Chicks? ... Eggs?" - with increasing puzzlement on each cycle.

It may have escaped your attention that we fund our schools with property taxes...

Cranky

Posted by Cranky Observer | April 27, 2008 8:53 PM

Re: No one would fault a middle-income family for aspiring to send its children to schools of at least average quality.

Which means that at least half the school districts should be in play and in a normal (non-bubble) real estate market they should be able to find an affordable house in one of those districts. The problem is that people have convinced themselves that schools matter far more than they do: provided the schools are decent, not blackboard jungles, and provided the family does not live in a bad neighborhood where bad peer influences (and a culture of anti-intellectualism) would be rife, a child's success in school will be determined by factors other than the school: like genetic heritage, family culture, etc. I went through a very average school system, but I had bright parents and more importantly parents for whom reading and learning were almost holy activities. So I excelled in school and it didn't matter one whit that come college time (let alone job interview time) I could only show a diploma from Blue Collar High not Snob High.

Re: Would you endorse the idea that the logical progression of this theory would be that school vouchers would help to avoid another housing crisis?

Unfortunately there's always going to be a geographic limitation: you can't send your kids to school some vast distance away from your home-- and with today's fuel prices that geographical limitation is getting a lot more limiting. Vouchers are not a solution, unless they come with Star Trek type transporters.

Re: The latter made no economic sense at all because America isn't getting more equal, isn't developing a more productive working class

Au contraire for the last part of this: productivity has grown by leaps and bounds over the last 40 years. Problem is very little of the gains have trickled down to the workers.

Posted by JonF | April 27, 2008 8:53 PM

cranky observer,

Judging by how few whites in Chicago, NYC, DC , LA send their children to public schools, there are probably few upper class whites who believe that diversity is more important than outstanding academics. Even Senator Obama sends his children to a private academy that is much more white and Asian than the public schools in his neighborhood. Or even Senator McCAin sent his daughter to a school that lacked the children of illegal aliens.

I find it odd that no one considers the elites stupid for spending $25K per year to send their children to elite private academies but the middle class is somehow stupid for trying to find the best public school.

Posted by superdestroyer | April 27, 2008 9:21 PM

Unless you place value on diversity and _not_ allowing your children to grow up in an "insulated" environment. Since the real world they will deal with is diverse and absolutely not "insulated" and getting moreso daily.

Not that I want to egg on superdestroyer, who has rather vapid comments and, like ostap, prefers to make hit-and-run input rather than contributing, but the added value of "diversity" is dubious.

There is probably "civic value" to diversity, in terms of viewing problems of "other people" as being "our problems," particularly when it comes to policymaking (eg, Americans simply don't give a shit about helping the rust belt economies or rebuilding New Orleans, because people who don't live there don't consider those in the rust belt or NOLA to be "our people").

However, "diversity" in a school environment, as opposed to an "insulated" environment, does not translate is any measurable way to any economic or academic benefits. If the average lifetime income of those who attended a diverse school system was higher than those whose families left for an "insulated" environment, then it would be a more logical choice.

Posted by Tyro | April 27, 2008 9:52 PM

Tyro,

"Americans simply don't give a shit about helping the rust belt economies or rebuilding New Orleans, because people who don't live there don't consider those in the rust belt or NOLA to be "our people""

I think the national outpouring in charitable efforts for New Orleans belies that, especially since a lot of those efforts came from very white areas (e.g., Utah, Minnesota, New England, etc.). In fact, if there were a way to crunch the numbers on this empirically, I'd guess that you'd find that more charity toward NOLA came from mostly-white areas than from more diverse areas.

Posted by Fred | April 27, 2008 10:16 PM

Fred, the apathy in the public square and in the political arena regarding the current state of NOLA and the rebuilding efforts (remind me, who's the "Katrina Czar" these days?) indicates otherwise. It isn't even primarily a racial issue, though that is small factor. America simply has a high tolerance for allowing decrepit, destitute shitholes to exist within its own borders, because we don't consider the people who live in them to be "our brothers and sisters."

Posted by Tyro | April 27, 2008 10:26 PM

"no one considers the elites stupid for spending $25K per year to send their children to elite private academies"

I do. The evidence suggests that they're buying something imaginary. But then they believe many silly things.

to fred: nearly every hick-town public school is safe, none are academically special, and yet their graduates do all right.

Posted by gcochran | April 27, 2008 10:26 PM

> However, "diversity" in a school environment,
> as opposed to an "insulated" environment, does not
> translate is any measurable way to any economic or
> academic benefits.

Based on my personal experience transferring from a white suburban school district (lower-middle; pink collar) into a City of Chicago public school voluntarily, and then attending a reasonably elite university (one of the booby prize schools to Matt's august halls), I would have to disagree. Learning to deal with a variety of people very much different from me, and with opposing outlooks on life, has helped me quite a bit over the years (more years than I like to think of at this point). At college when I had to deal with the children of the elite, and more so when I started working internationally. The world really isn't just insulated middle-middle class American WASPs.

Cranky

Posted by Cranky Observer | April 27, 2008 10:32 PM

Tyro,

You need to separate couple of different things conceptually. When it came to helping people from New Orleans, there was a tremendous outpouring of charitable help, from all over America. As I said before, I would guess more of this help came from whiter, less-diverse areas. When it comes to throwing tends of billions of dollars more to pay illegal immigrants from Mexico to rebuild shit hole, way-below-sea level parts of New Orleans there is some justifiable ambivalence, particularly since the city has been in economic decline for about 200 years. Let it carry on as a scaled-down version of itself, limited to the relatively higher ground areas like it used to be.

Greg Cochran,

That's true about hick towns. But for parents in many large metro areas, the towns with the 'good' schools are usually also the towns within commutable distance that have the safe schools.

Posted by Fred | April 27, 2008 11:21 PM

Actually, the problem is there aren't more jobs in hick towns. I think it was Michael Lind who proposed the government make a concerted effort to relocate jobs to the emptier parts of this country.

Its true that Midwesterners are by any measurement, superior human beings-- and no I'm not a Midwesterner-- but damn their real estate is sooo cheap (I exempt Chicago from the above generalization, as Matt astutely noted last summer, it looks like its on the ocean). If there are halfway decent job in a small town, you need much less income to own a good home in a safe neighborhood with schools you won't be afraid to send your kids to.

To give one example, I have a friend in a hick town in the upper midwest. He lives in a nice 3 bedroom, 2 bath house on a quiet street where no one locks their door and the elemenary school and the "downtown" are just a few minutes walk.

My friend will probably make mid six figures this year (good time to be a corn farmer) but his $80,000 house is no more or less extravagant than the homes of his neighbors (who earn perhaps a tenth of what he does). Hell, can you even buy a condo for $80,000 in most big cities?

Posted by beowulf | April 28, 2008 2:53 AM

OK OK, so maybe people don't want to live in some one stoplight cowtown, no matter how cheap the real estate or how egalitarian the society.

If you can't bring Mohammad to the mountain, then bring the mountain to Mohammad.
http://www.tpaine.org/tphgprop.htm

Posted by beowulf | April 28, 2008 3:07 AM

Chris,

Right, but that extra $Y in the home's price for better public schools was also there pre-bubble, and that $Y is more or less constrained by private schools, since if the mortgage and taxes on $Y gets higher than private school tuition, it will make sense for parents not to pay an extra $Y for their house (meaning live in a not-so-good school district) and instead just pay for private school.

On a general point, it is utterly unnecessary for a decent private school to cost $25K for day school tuition--indeed, at that point a large chunk of the tuition is almost surely going to things that may be fun for the kids, but will have little to do with actual instructional benefit.

Posted by DTM | April 28, 2008 4:16 AM

On a general point, it is utterly unnecessary for a decent private school to cost $25K for day school tuition--indeed, at that point a large chunk of the tuition is almost surely going to things that may be fun for the kids, but will have little to do with actual instructional benefit.

This raises an interesting point: it's well-known that private school teachers' salaries are lower than the salaries of public school teachers. Plus, there's less overhead in terms of, say, special education staff, social workers, etc. (though it may even out in terms of other administrative overhead that public schools need less of due to economies of scale).

So where does the money go? Perhaps physical plant? Extracurriculars? Or, perhaps, is per-student spending in public schools underestimated for some reason (eg, are certain things for schools accounted in the general budget rather than the general education budget?")

Posted by Tyro | April 28, 2008 9:48 AM

The Reverend Wright shared some interesting thoughts about education and schools last night, and how blacks and whites learn differently.

Posted by Fred | April 28, 2008 10:15 AM

Actually, the problem is there aren't more jobs in hick towns. I think it was Michael Lind who proposed the government make a concerted effort to relocate jobs to the emptier parts of this country.

There might be an actual reason why there aren't more jobs in "hick towns" to the point where a more productive government program might be for the government to give people incentives to move out of hick towns to places where there are more jobs.

Many of us here in America are here because our ancestors saw that there weren't any jobs in their home countries and moved to the USA... so it doesn't strike me as out of bounds to create programs to help their descedents to do the same when it comes to dealing with the poor economic situation in the Appalachians.

On one hand, we shouldn't be tolerating substandard infrastructure and living conditions in the USA, but on the other hand, we shouldn't expect jobs to simply "appear." Robert Byrd has done everything in his power to exploit the full force of government to funnel every last possible job and economic development program into West Virginia. WV is probably better off than it would have been otherwise, but it hasn't exactly turned the state into an economic powerhouse, particularly when compared with its neighbors Virginia and Maryland.

Posted by Tyro | April 28, 2008 10:50 AM

"Most young Chicago parents in their financial situation would have moved to an upscale suburb such as Wilmette, paid a big property tax bill, and in return received a wonderful array of school and recreational services for their children in a pre-insulated social environment with the children of other people who could afford to live in Wilmette. But Barack had to live for political purposes in his district, so they had to spend a fortune a la carte on privately insulating their children."

BUT, there is a meaningful cohort of parents who would choose to send their kids to Lab regardless of alternatives. BO and MO fit that cohort--I would expect them, in the absence of legislative district requirements, to (a) live in Hyde Park and (b) send their kids to Lab. Besides, both of them were working for UC (at least part time) when they bought their house and for some time before that. Were I affiliated with UC, I'd probably live in HP, too, whether or not homes in New Trier were "affordable" to me or not.

Commenting on specific school choice w/o meaningful knowledge of the alternatives and the reasons why one would choose a given alternative is pretty pointless.

Posted by zaleriana | April 28, 2008 11:16 AM

Tyro- The extra money goes into programs for kids with significant to moderate problems. Public school is the test bed for any solution to any problem you can imagine, plus special needs kids (physically handicapped, autistic, emotionally disturbed). These classes have small ratios and many teachers aides.
The second major loss is just trying to meet federal standards. There are a ton of niggly little federal requirements that private schools don't have to meet. The administration needed to just document these requirements, the extra expense of building up to code... A private school can go into strip mall because it doesnt have to worry about these things. Public school classrooms are ridiculously expensive to construct because of this.

Posted by quix0te | April 28, 2008 11:24 AM

Any thoughts on the role of failing urban schools on sprawl? In Missouri, the cities with large, failing urban school districts tend to be the ones with the worst sprawl and the worst traffic. Nobody wants to raise kids in the Kansas City School District, and the effects ripple out from there.

Posted by MikeT | April 28, 2008 11:26 AM

Ditto with the above comments. The Obamas live in Hyde Park and send their kids to lab because THAT'S WHAT HIGH INCOME AFRICAN-AMERICAN FAMILIES DO IN CHICAGO. (You can also exchange "Hyde Park" with "Kenwood," "North Kenwood," or "Englewood".)

People who don't live in Chicago (or New York) don't realize that really big cities have thriving upper middle class African-American communities filled with lawyers and doctors and college professors who (a) have a lot of money to spend on homes and schools and (b) would prefer their children to live in a community with people who look like them.

Posted by Joe | April 28, 2008 11:45 AM

Tyro,

I don't know the overall private school budget statistics, but I was in one of those $25K private schools the other day and among other things it had a rock-climbing wall. So I am personally assuming there is indeed a lot of what I would call "gold-plating" going on when it comes to facilities and non-academic activities in these private schools.

By the way, I don't actually have a problem with rich people paying for all that stuff for their kids. I just don't think it has anything to do with education per se.

Posted by DTM | April 28, 2008 12:40 PM

As someone who taught at several of those $25K private schools (Lab School among them), I can assure you that the teachers do NOT get much of that tuition, and the benefits are lousy, too. Here's where the money goes: small classes. I had classes of 12 or 15 usually, and then only 4 in a day (as opposed to 5 in a typical public school). We made up that teaching time with endless meetings, though. Plus, there was a published directory with all our names and addresses in it, which meant fielding calls from parents at all hours of the day and weekends, too. Such a pleasure. So the parents are also paying to be able to think of their kids' teachers as servants.

Posted by touhy | April 28, 2008 2:54 PM