Rent Deregulation, Tenure Choice, and Real Estate Price Expectations
AbstractWe study a natural experiment in the Czech Republic where the maximum regulated rent appreciation has depended explicitly on the price of real estate since 2007. We track the tenure choice of households from consumption surveys for subsequent years. Rent deregulation makes households in regulated apartments more likely to own real estate while the opposite is true for other renters and owners. The net present value of buying property vs renting is an increasing function of the real estate price appreciation for renters in regulated apartments. We use their tenure choice to generate the distribution of property price expectations.
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Bibliographic InfoPaper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp430.
Date of creation: Jan 2011
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Czech Republic; expectations; rent regulation and deregulation; real estate prices; tenure choice;
Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- 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, Production Analysis, and Firm Location - - - Housing Supply and Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-26 (All new papers)
- NEP-REG-2011-03-26 (Regulation)
- NEP-TRA-2011-03-26 (Transition Economics)
- NEP-URE-2011-03-26 (Urban & Real Estate Economics)
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.:
- Bas van der Klaauw & Udo Kock, 1999. "Evaluating Dutch Housing Market Regulation," Tinbergen Institute Discussion Papers 99-007/3, Tinbergen Institute.
- Roistacher, Elizabeth A., 1992. "Rent regulation in New York City: Simulating decontrol options," Journal of Housing Economics, Elsevier, vol. 2(2), pages 107-138, June.
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