Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment
Partners
Key Finding
By providing information about school quality, affordable housing websites can help families move to opportunity.
When families searching for Section 8 housing are given information about the quality of neighborhood schools, they choose neighborhoods with higher-performing, less segregated schools. This simple, effective intervention is now in place across one of the country’s most popular affordable housing search websites.
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Other Findings
Easy access to school quality information helps families move to opportunity, but housing decisions are still influenced by the amount and type of information families receive, the supply of desirable apartment units, and other family preferences.
Still, the research shows that providing the information is more effective at helping families pick neighborhoods with higher-quality schools than previously understood. If housing supply isn’t a factor, the researchers’ model of users on AffordableHousing.com suggests families are willing to commute twice as far to attend a higher-quality school than the model would suggest if it ignored the role of information.
Families who received the information ultimately chose housing with schools where ratings translated to a 1.5 percentage point increase in the share of students that are proficient on state exams.
Families often hold inaccurate beliefs about where high-quality schools are located, and successful interventions should take these prior beliefs into account.
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Methodology & Data Highlights
A Randomized Controlled Trial (RCT) in which data from GreatSchools.org was made available to a randomly selected group of users on AffordableHousing.com from May 2015 to February 2017.
A model of households’ search behavior and moving decisions, to understand the role of imperfect information in neighborhood choice.
AffordableHousing.com users were matched to 1,965 heads of households in a HUD database on voucher recipients.
Summary
Across the United States, school zoning policies that tie school attendance to where families live have long segregated low-income families into low-performing schools. This is especially true for families that use vouchers from a federal housing program (Section 8) to help pay their rent.
Families using vouchers may live in neighborhoods zoned to low-performing schools for several reasons. Discrimination may play a role, with some landlords refusing to accept Section 8 vouchers or falsely claiming that voucher-eligible vacant housing units have already been rented. But other barriers likely exist, as well.
To better understand why families don’t move to neighborhoods with higher-quality schools, this paper explores another potential barrier: Families lacking access to information about school quality or holding biased, and perhaps inaccurate, views about how local schools are rated.
To understand what role information about school quality plays in housing decisions, the researchers estimate a model of demand for housing and neighborhood amenities in which households may not have the necessary information about a given school’s quality or may hold inaccurate, prior beliefs about where high-quality schools can be found.
Figure 4 from Housing Search Frictions
Forging a partnership between AffordableHousing.com & GreatSchools.org
The research was made possible through a collaboration with AffordableHousing.com (at the time GoSection8.com)—a website of nationwide rental properties that accept housing vouchers.
To build a model that teases out the role of information about neighborhood schools in housing decisions, the researchers added school quality information from GreatSchools.org to listings on AffordableHousing.com that were viewable to a random sample of users.
The researchers then linked robust user data–including search and housing application behavior and a wealth of information provided by users during sign-up–to demographic and current location data on voucher recipients maintained by the Department of Housing and Urban Development (HUD).
Figure 7 from Housing Search Frictions
When given the right information at the right time, families move to opportunity
The model shows that a lack of necessary information about school quality causes low-income families to live in neighborhoods with lower-performing, more segregated schools. However, when given information about the quality of zoned schools for a particular housing unit, users search for and move to neighborhoods with higher-performing schools. [1]
When compared to schools in locations chosen by families that didn’t receive the information intervention, families who received the information ultimately chose housing with schools where ratings translated to a 1.5 percentage point increase in the share of students that are proficient on state exams (a 0.10 standard deviation in higher ratings).
From research to real policy impact.
The policy intervention developed and tested in this paper is now active on AffordableHousing.com, benefiting hundreds of thousands of nationwide Section 8 voucher holders every year. Read more about the partnership between Learning Collider researchers, AffordableHousing.com, and GreatSchools.org from our friends at J-PAL.
Relative to other amenities, families place a high value on school quality
One benefit of the researchers’ model is that it allows them to separate out housing supply issues and study how preferences and school quality information alone affect a family’s housing search. In a world where the housing supply is beyond our control, how much does the information intervention help?
They find that housing supply aside, families are willing to commute an additional 54 minutes for a 10 percentile point increase in school quality. That commute is twice as far as the model would predict if it didn’t take into account the barrier created by a lack of information about school quality.
In other words, ignoring the role of information about school quality leads researchers to underestimate how much families are willing to sacrifice–in this case extra commuting time–to live in a neighborhood with a better school.
Prior beliefs about which neighborhoods have high-quality schools are often inaccurate
Finally, the researchers argue that creating an effective intervention must take into account how prior beliefs about school quality may influence housing search decisions. Ultimately, they find that families often hold inaccurate beliefs about where high-quality schools can be found.
They argue that models used to design interventions should assume families may have, based on their own observations, formed ideas about school quality that depart from “rational expectations.”
Research in the real world
Previous research has shown that housing vouchers help families move to neighborhoods with less poverty and that moving to these neighborhoods improves life outcomes for children that move at a young age.
But often, these moves to new neighborhoods don’t guarantee children attend higher-quality schools. Because of this, providing information about school quality to families searching for affordable housing is a promising policy intervention that can work alongside more expensive programs that address the broader range of barriers low-income families face when trying to move to opportunity.
Footnotes:
[1] Importantly, the authors perform several exercises to test whether discrimination plays a role in dissuading families from moving to a new neighborhood, including an exercise where they sent 1,450 messages to landlords on AffordableHousing.com and, in half of those messages, indicated an intention to use a housing voucher. The authors found no evidence of discrimination from landlords based on the tenant’s intent to use a voucher.