On Setting Apartment Rental Rates: A Regression-Based Approach

J. OF REAL ESTATE RESEARCH, Vol 12 No. 1

Posted: 1 Aug 1997  

Joseph L. Pagliari

University of Chicago - Booth School of Business

James R. Webb

Cleveland State University

Abstract

This study presents a regression-based analysis of apartment rents for a crosssection of properties located in an "edge city" submarket. It attempts to provide a solution for owners and managers of apartments to the thorny problem of setting a property's rental rate. The approach used in this analysis differs from previous studies in at least three important respects: (1) vacancy is treated as part of the dependent variable, (2) the property-specific rental rate generated by the regression analysis is compared to the property's actual effective rent, and (3) each property in the submarket is ranked by the difference between its actual effective rent and its characteristic-adjusted effective rent. This is then followed by several observations concerning the advantages and disadvantages of such an analysis in a practical setting.

JEL Classification: R0

Suggested Citation

Pagliari, Joseph L. and Webb, James R., On Setting Apartment Rental Rates: A Regression-Based Approach. J. OF REAL ESTATE RESEARCH, Vol 12 No. 1. Available at SSRN: https://ssrn.com/abstract=9307

Joseph L. Pagliari

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

James R. Webb (Contact Author)

Cleveland State University ( email )

1860 E. 18th St., BU 327E
Cleveland, OH 44115
United States
216-687-4716 (Phone)
216-687-4716 (Fax)

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