Estimating household demand for housing attributes in rent-controlled markets

Jos van Ommeren () and Marloes Graaf-de Zijl

Journal of Housing Economics, 2013, vol. 22, issue 1, 11-19

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.

Keywords: Rent control; Willingness to pay (search for similar items in EconPapers)
JEL-codes: R21 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:22:y:2013:i:1:p:11-19

DOI: 10.1016/j.jhe.2013.02.003

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