A Model of Regulation in the Housing Market
AbstractThis paper develops a theoretical model to study the effects of regulation on the housing market. Our model emphasises the following specific features of the housing market : product heterogeneity plays an important role, search costs are high, switching (moving) costs are substantial, and the possibilities to price discriminate are important. We show that in an unregulated housing market rents will increase at the time of renegotiation as a result of the "hold-up" problem. A regulation which limits the owners' possibilities to increase his rents for a certain number of years leads to lower equilibrium rents and higher social welfare. Our model strongly suggests that a policy which consists of indexing rents may be socially preferable to a simple laissez-faire solution.
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 InfoPaper provided by Université de Lausanne, Faculté des HEC, DEEP in its series Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) with number 9903.
Length: 38 pages
Date of creation: Feb 1999
Date of revision:
Contact details of provider:
Postal: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne
Phone: ++41 21 692.33.64
Fax: ++41 21 692.33.05
Web page: http://www.hec.unil.ch/deep/publications/cahiers/series
More information through EDIRC
housing; monopolistic competition; regulation; search; hold-up;
Find related papers by JEL classification:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Raess, Pascal & von Ungern-Sternberg, Thomas, 2002. "A model of regulation in the rental housing market," Regional Science and Urban Economics, Elsevier, vol. 32(4), pages 475-500, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudine Delapierre Saudan).
If references are entirely missing, you can add them using this form.