Rent Control with Rationing by Search Costs: A Note

Clifford Thies ()

The Journal of Real Estate Finance and Economics, 1993, vol. 7, issue 2, 159-65

Abstract: This note derives the long-run implications of rent controls when rent-controlled apartments are implicitly rationed to tenants who are more efficient in searching for apartments in the controlled sector. Rent controls are shown to involve transfers that essentially are from some to other tenants, as well as dead-weight losses due to higher search costs that are borne by tenants. Key to this analysis the condition that, at the margin, rent plus the higher cost of search for a rent-controlled apartment must equal rent in the noncontrolled sector. Copyright 1993 by Kluwer Academic Publishers

Date: 1993
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