Discussion Papers of Business and Economics
Department of Business and Economics, University of Southern Denmark
Rent control and misallocation
() and Morten Skak
Abstract: The paper considers welfare effects of rent control when
it is applied only in a sector of a rental housing market. In rent
controlled sectors of the Danish rental housing market, we find welfare
reducing overallocation of square meters between 9 and 17 per cent of
actual allocations. Looking at the 20 per cent most overallocated
households, the overallocation of square meters is between 42 and 92 per
cent, and the estimated corresponding welfare loss ranges from 1.5 to 5.3
per cent of the average annual rent in the sectors.
Keywords: Rent control; Housing; Regulation; Price ceiling; Rationing; Allocation; (follow links to similar papers)
JEL-Codes: D11; D61; L51; R21; R31; (follow links to similar papers)
25 pages, October 15, 2009
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