We examine residential relocation and opting out of the public school system in response to school choice lottery outcomes. We show that rising kindergartners and sixth graders who lose a school choice lottery are 6 percentage points more likely to exit the district or change neighborhood schools (20% to 30% increase) and make up 0.14 to 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% to 11% housing price premium for access to a school with a 1 standard deviation higher mean test score.

We examine the housing market and residential mobility changes that occur soon after a Title 1 school fails to achieve adequate yearly progress (AYP) in Charlotte, North Carolina. Students within attendance zones of failing schools are given priority in lotteries for oversubscribed schools, potentially increasing the attractiveness of living in a failing school attendance zone. We find that housing prices, home buyer income, and the probability of attending a nonassigned school increase in the highest-quality neighborhoods within failing school attendance zones. Our results are driven largely by the behavior of new residents.