Rent Control and Tenancy Duration

Aarhus Economics Working Paper No. 01-7

27 Pages Posted: 21 Oct 2001

See all articles by Jakob Roland Munch

Jakob Roland Munch

University of Copenhagen - Department of Economics; Center for Economic and Business Research (CEBR)

Michael Svarer

Aarhus University - Department of Economics and Business Economics; Institute for the Study of Labor (IZA)

Date Written: October 2001

Abstract

This paper investigates how rent control affects mobility on the Danish private rental housing market. Based on a unique and extensive data set a measure of the degree of rent regulation of each housing unit is calculated, and this is coupled with socio-economic characteristics and spells of tenancy duration for each household. To accommodate the special features of such a data set we apply a proportional hazard duration model, that encompasses both the presence of left truncated tenancy durations, right censored observations and allows for a very flexible specification of the time dependency as captured by the baseline hazard function. We find that tenancy mobility is severely reduced by the presence of rent control. Tenancy duration for a typical household in the private rental sector is found to be more than six years longer if the apartment belongs to the 10 per cent most regulated units than if it belongs to the 10 per cent least regulated units.

Keywords: Rent control, mobility, duration model

JEL Classification: C41, R31, D45, L51

Suggested Citation

Munch, Jakob Roland and Svarer, Michael, Rent Control and Tenancy Duration (October 2001). Aarhus Economics Working Paper No. 01-7, Available at SSRN: https://ssrn.com/abstract=287632 or http://dx.doi.org/10.2139/ssrn.287632

Jakob Roland Munch

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 35323019 (Phone)
+45 35323000 (Fax)

HOME PAGE: http://www.econ.ku.dk/Faculty_And_Staff/showID.asp?profile_id=1260

Center for Economic and Business Research (CEBR)

Porcelaenshaven, Bldg 65
DK-2000 Frederiksberg
Denmark

Michael Svarer (Contact Author)

Aarhus University - Department of Economics and Business Economics ( email )

Universitetsparken
Building 350
DK-8000 Aarhus C
Denmark
+45 8942 1598 (Phone)
+45 8613 6334 (Fax)

Institute for the Study of Labor (IZA)

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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