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Welfare effects of rent control — A comparison of redistributive policies

Martin Micheli and Torsten Schmidt

Economic Modelling, 2015, vol. 48, issue C, 237-247

Abstract: In this paper we compare the welfare effects of rent control, linking properties' rental prices to purchase prices, to the most standard redistribution policy, an increase in tax financed transfers to the less wealthy. We calibrate a general equilibrium model with heterogeneous agents, which differ with respect to their time preference, to fit key characteristics of the German economy. This way, we show that the introduction of rent control Pareto dominates tax financed transfer payments in steady state.

Keywords: Real estate prices; Rent control; General equilibrium; Redistribution (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:48:y:2015:i:c:p:237-247

DOI: 10.1016/j.econmod.2014.11.023

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