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The Hidden Cost of Smoking: Rent Premia in the Housing Market

Cigdem Gedikli, Robert Hill (), Oleksandr Talavera and Okan Yilmaz ()
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Cigdem Gedikli: Swansea University
Okan Yilmaz: Swansea University

Discussion Papers from Department of Economics, University of Birmingham

Abstract: In this paper, we provide novel evidence on the additional costs associated with smoking. While it may not be surprising that smokers pay a rent premium, we are the first to quantify the size of this premium. Our approach is innovative in that we use text mining methods that extract implicit information on landlords' attitudes to smoking directly from Zoopla UK rental listings. Applying hedonic, matching and machine-learning methods to the text-mined data, we find a positive smoking rent premium of around 6 percent. This translates into 14.40GBP of indirect costs, in addition to 40GBP of weekly spending on cigarettes estimated for an average smoker in the UK.

Keywords: Smoking; Rental market; Hedonic regression; Matching; Text mining; Random forest; Smoking rent premium; Contracting frictions (search for similar items in EconPapers)
JEL-codes: I30 R21 R31 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2022-03
New Economics Papers: this item is included in nep-big, nep-cmp, nep-eur and nep-ure
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