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Reforming housing rental market in a life-cycle model

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  • Michal Rubaszek

Abstract

Housing rental market share in most countries around the world is low. We explore the reasons behind this underdevelopment with a survey conducted among a representative group of 1005 Poles. It turns out that strong tenure preferences of households toward owning can be attributed to both economic and psychological factors. Building on these findings, we develop a life-cycle model and evaluate the effect of the following reforms aimed at improving the functioning of the rental market: (i) changing the quality of rental services, (ii) reducing the risk of investment in rental housing and (iii) removing fiscal incentives for owning. The results indicate that the reforms, if introduced simultaneously, significantly increase the rental market share.

Suggested Citation

  • Michal Rubaszek, 2017. "Reforming housing rental market in a life-cycle model," KAE Working Papers 2017-028, Warsaw School of Economics, Collegium of Economic Analysis.
    • Handle: RePEc:sgh:kaewps:2017028
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    File URL: http://kolegia.sgh.waw.pl/pl/KAE/Documents/WorkingPapersKAE/WPKAE_2017_028.pdf
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    More about this item

    Keywords

    Housing rental market; survey data; life-cycle model; heterogenous agent model.;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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