Rent Control and the Housing Expenditure Share
Using Danish register data we observe that households living in rental housing subject to rent regulations pay lower rents and have a lower expenditure share than households living in unregulated housing. We set up a model with rent control on a fraction of the housing stock, an explicit treatment of housing quality, and preferences including minimum housing and allowing for a non-constant share of housing in expenditure. The model broadly ?ts the data, and we ?nd evidence of signi?cant complementarity between housing and non durable consumption. Furthermore, the policy implications of our model are surprising in that a complete liberalization of the market achieves a modest welfare gain of under 1%.
|Date of creation:||18 May 2013|
|Date of revision:|
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- Morten Skak & Gintautas Bloze, 2013.
"Rent Control and Misallocation,"
Urban Studies Journal Limited, vol. 50(10), pages 1988-2005, August.
- Martin Gervais & Jonas Fisher, 2008.
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- Blair Jenkins, 2009. "Rent Control: Do Economists Agree?," Econ Journal Watch, Econ Journal Watch, vol. 6(1), pages 73-112, January.
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