Rent Control and Misallocation
AbstractRent control is still an important type of government regulation of housing markets in many countries and numerous researchers have studied its implications for allocation, welfare and investments in housing. The present paper aims to improve our understanding of the effect of second-generation rent control when it is applied only to one sector of the rental market. It is diagrammatically shown that the welfare effects are very different between a universal and a limited application of rent control. Studying the Danish case of second-generation rent control, lower rents are found in controlled sectors and a minor increase of the rent in the uncontrolled sector. Using the area of living space in the dwelling as a measure for housing consumption, evidence is also produced of both overallocation and underallocation of housing in the rent-controlled sectors; as envisaged by economic theory.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Urban Studies Journal Limited in its journal Urban Studies.
Volume (Year): 50 (2013)
Issue (Month): 10 (August)
Contact details of provider:
Web page: http://www.gla.ac.uk/departments/urbanstudiesjournal
Other versions of this item:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Morten Skak, 2008.
"Projecting Demand for Rental Homes in Denmark,"
European Journal of Housing Policy,
Taylor and Francis Journals, vol. 8(3), pages 235-262.
- Hackner, Jonas & Nyberg, Sten, 2000.
" Rent Control and Prices of Owner-Occupied Housing,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 102(2), pages 311-24, June.
- Edward L. Glaeser & Erzo F. P. Luttmer, 2003.
"The Misallocation of Housing Under Rent Control,"
American Economic Review,
American Economic Association, vol. 93(4), pages 1027-1046, September.
- Edward L. Glaeser, 1996.
"The Social Costs of Rent Control Revisted,"
Harvard Institute of Economic Research Working Papers
1747, Harvard - Institute of Economic Research.
- Marks, Denton, 1984. "The effects of partial-coverage rent control on the price and quantity of rental housing," Journal of Urban Economics, Elsevier, vol. 16(3), pages 360-369, November.
- Gyourko, Joseph & Linneman, Peter, 1990. "Rent controls and rental housing quality: A note on the effects of New York City's old controls," Journal of Urban Economics, Elsevier, vol. 27(3), pages 398-409, May.
- Richard Arnott, 1995. "Time for Revisionism on Rent Control?," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 99-120, Winter.
- João Miguel Ejarque & Joachim Borg Kristensen, 2013. "Rent Control and the Housing Expenditure Share," CAM Working Papers 2013-01, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If references are entirely missing, you can add them using this form.