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Rent Control Evasion: Effects on Income and Deadweight Loss

Author

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  • Filip Palda

    (Ecole nationale d'administration publique in Montreal)

Abstract

When ability to avoid rent control is randomly distributed over landlords, housing may rise above its free market level. Landlords evading part of rent-control are like suppliers selling to a perfectly price-discriminating monopsonist. A continuum of evasive abilities gives a range of low rent landlords, charging different prices and to whom tenants flock. High housing supply comes at the expense of deadweight loss due to adverse selection of landlords with high costs and good evasive abilities.Rent-control produces an equilibrium {\em range} of rents and raises what some tenants pay above that which they would pay in an unregulated market.

Suggested Citation

  • Filip Palda, 2001. "Rent Control Evasion: Effects on Income and Deadweight Loss," Urban/Regional 0112001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpur:0112001
    Note: Type of Document - pdf; prepared on IBM PC ; to print on HP/PostScript; pages: 38; figures: included. PDF document may be viewed or printed.
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    rent control; informal sector; deadweight loss;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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