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Estimating household demand for housing attributes in rent-controlled markets

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  • Van Ommeren, Jos
  • Graaf-de Zijl, Marloes

Abstract

We estimate the household’s marginal willingness to pay for housing attributes in the rent-controlled sector, so where rents are not freely market determined. The application of hedonic price approaches to obtain estimates of the household’s value of housing characteristics is then invalid. We apply an alternative estimation approach based on residential mobility. In our application, we focus on the households’ willingness to pay for number of rooms as well as the willingness to pay to avoid a long commuting distance. Our estimates appear plausible. For example, for households in the rent-controlled sector are willing to pay about 7% of their household income for an additional room. The implied marginal costs of commuting are about €0.17–€0.23 per (one-way) kilometre.

Suggested Citation

  • Van Ommeren, Jos & Graaf-de Zijl, Marloes, 2013. "Estimating household demand for housing attributes in rent-controlled markets," Journal of Housing Economics, Elsevier, vol. 22(1), pages 11-19.
    • Handle: RePEc:eee:jhouse:v:22:y:2013:i:1:p:11-19
    DOI: 10.1016/j.jhe.2013.02.003
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    More about this item

    Keywords

    Rent control; Willingness to pay;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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