The Misallocation of Housing Under Rent Control
The standard analysis of price controls assumes that goods are efficiently allocated, even when there are shortages. But if shortages mean that goods are randomly allocated across the consumers that want them, the welfare costs from misallocation may be greater than the undersupply costs. We develop a framework to empirically test for misallocation. The methodology compares consumption patterns for demographic subgroups in rent-controlled and free-market places. We find that in New York City, which is rent-controlled, an economically and statistically significant fraction of apartments appears to be misallocated across demographic subgroups. (JEL C25, D12, D61, R20)
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Volume (Year): 93 (2003)
Issue (Month): 4 (September)
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References listed on IDEAS
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.:
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"The Social Costs of Rent Control Revisted,"
Harvard Institute of Economic Research Working Papers
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- Edward L. Glaeser & Erzo F. P. Luttmer, 1997.
"The Misallocation of Housing Under Rent Control,"
NBER Working Papers
6220, National Bureau of Economic Research, Inc.
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- Mark Frankena, 1975. "Alternative Models of Rent Control," Urban Studies, Urban Studies Journal Limited, vol. 12(3), pages 303-308, October.
- Suen, Wing, 1989. "Rationing and Rent Dissipation in the Presence of Heterogeneous Individuals," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1384-94, December.
- Cheung, Steven N S, 1974. "A Theory of Price Control," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 53-71, April.
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- Richard Arnott, 1995. "Time for Revisionism on Rent Control?," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 99-120, Winter.
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