IDEAS home Printed from https://ideas.repec.org/a/eee/jhouse/v21y2012i1p28-40.html
   My bibliography  Save this article

Why Do Landlords Include Utilities in Rent? Evidence from the 2000 Housing Discrimination Study (HDS) and the 2002 American Housing Survey (AHS)

Author

Listed:
  • Choi, Seok Joon
  • Kim, Sangsin

Abstract

This study assesses the decision to include utilities in the rent and the effect of this decision on rents. We utilize individual house-level data from the 2000 Housing Discrimination Study (HDS) and 2002 American Housing Survey (AHS), and determine that the cost of meter installation is not the only reason that utility costs are included in rent. We find evidence that landlords include utilities in the rent to attract more customers. Additionally, our findings demonstrate that utility inclusion behavior differs significantly between old and new building owners. For the hedonic rent estimation, we find that the decision to include the cost of utilities in the rent raises rent.

Suggested Citation

  • Choi, Seok Joon & Kim, Sangsin, 2012. "Why Do Landlords Include Utilities in Rent? Evidence from the 2000 Housing Discrimination Study (HDS) and the 2002 American Housing Survey (AHS)," Journal of Housing Economics, Elsevier, vol. 21(1), pages 28-40.
    • Handle: RePEc:eee:jhouse:v:21:y:2012:i:1:p:28-40
    DOI: 10.1016/j.jhe.2012.02.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S105113771200006X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhe.2012.02.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dewees, Donald N & Wilson, Thomas A, 1990. "Cold Houses and Warm Climates Revisited: On Keeping Warm in Chicago, or Paradox Lost: Comment," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 656-663, June.
    2. Friedman, David, 1987. "Cold Houses in Warm Climates and Vice Versa: A Paradox of Rational Heating," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 1089-1097, October.
    3. Levinson, Arik & Niemann, Scott, 2004. "Energy use by apartment tenants when landlords pay for utilities," Resource and Energy Economics, Elsevier, vol. 26(1), pages 51-75, March.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Jan Ondrich & Stephen Ross & John Yinger, 2003. "Now You See It, Now You Don't: Why Do Real Estate Agents Withhold Available Houses from Black Customers?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 854-873, November.
    6. Margery A. Turner & Stephen Ross & George C. Galster & John Yinger, 2002. "Discrimination in Metropolitan Housing Markets: National Results from Phase 1 of the Housing Discrimination Study (HDS)," Working papers 2002-16, University of Connecticut, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    2. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    3. Bajo-Buenestado, Raúl, 2021. "The effect of blackouts on household electrification status: Evidence from Kenya," Energy Economics, Elsevier, vol. 94(C).
    4. Guang Hu & Yue Tang, 2023. "GERPM: A Geographically Weighted Stacking Ensemble Learning-Based Urban Residential Rents Prediction Model," Mathematics, MDPI, vol. 11(14), pages 1-36, July.
    5. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ana Ramos & Xavier Labandeira & Andreas Löschel, 2016. "Pro-environmental Households and Energy Efficiency in Spain," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 367-393, February.
    2. Levinson, Arik & Niemann, Scott, 2004. "Energy use by apartment tenants when landlords pay for utilities," Resource and Energy Economics, Elsevier, vol. 26(1), pages 51-75, March.
    3. Xavier Labandeira & Ana Ramos, 2012. "Household Environmental Attitudes and Energy Efficiency in Buildings: Evidence from Spanish Data," Working Papers fa08-2012, Economics for Energy.
    4. Petrov, Ivan & Ryan, Lisa, 2021. "The landlord-tenant problem and energy efficiency in the residential rental market," Energy Policy, Elsevier, vol. 157(C).
    5. Konstantin A Kholodilin & Andreas Mense & Claus Michelsen, 2017. "The market value of energy efficiency in buildings and the mode of tenure," Urban Studies, Urban Studies Journal Limited, vol. 54(14), pages 3218-3238, November.
    6. Zhao, Bo & Ondrich, Jan & Yinger, John, 2006. "Why do real estate brokers continue to discriminate? Evidence from the 2000 Housing Discrimination Study," Journal of Urban Economics, Elsevier, vol. 59(3), pages 394-419, May.
    7. Kahn, Matthew E. & Walsh, Randall, 2015. "Cities and the Environment," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 405-465, Elsevier.
    8. Zhao, Bo, 2005. "Does the number of houses a broker shows depend on a homeseeker's race?," Journal of Urban Economics, Elsevier, vol. 57(1), pages 128-147, January.
    9. Ahmed, Ali M. & Andersson, Lina & Hammarstedt, Mats, 2008. "Are lesbians discriminated against in the rental housing market? Evidence from a correspondence testing experiment," Journal of Housing Economics, Elsevier, vol. 17(3), pages 234-238, September.
    10. John Yinger, 2009. "Hedonic Markets and Explicit Demands: Bid-Function Envelopes for Public Services, Neighborhood Amenities, and Commuting Costs," Center for Policy Research Working Papers 114, Center for Policy Research, Maxwell School, Syracuse University.
    11. Kaiser, Mark J. & Pulsipher, Allan G., 2010. "Preliminary assessment of the Louisiana Home Energy Rebate Offer program using IPMVP guidelines," Applied Energy, Elsevier, vol. 87(2), pages 691-702, February.
    12. Ramos, A. & Gago, A. & Labandeira, X. & Linares, P., 2015. "The role of information for energy efficiency in the residential sector," Energy Economics, Elsevier, vol. 52(S1), pages 17-29.
    13. Schuler, Andreas & Weber, Christoph & Fahl, Ulrich, 2000. "Energy consumption for space heating of West-German households: empirical evidence, scenario projections and policy implications," Energy Policy, Elsevier, vol. 28(12), pages 877-894, October.
    14. Ali M. Ahmed & Lina Andersson & Mats Hammarstedt, 2010. "Can Discrimination in the Housing Market Be Reduced by Increasing the Information about the Applicants?," Land Economics, University of Wisconsin Press, vol. 86(1), pages 79-90.
    15. Bakkensen, Laura A. & Ma, Lala, 2020. "Sorting over flood risk and implications for policy reform," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    16. Choi, Seok Joon & Ondrich, Jan & Yinger, John, 2005. "Do rental agents discriminate against minority customers? Evidence from the 2000 Housing Discrimination Study," Journal of Housing Economics, Elsevier, vol. 14(1), pages 1-26, March.
    17. Ritter, Matthias & Hüttel, Silke & Odening, Martin & Seifert, Stefan, 2020. "Revisiting the relationship between land price and parcel size in agriculture," Land Use Policy, Elsevier, vol. 97(C).
    18. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    19. Maristella Botticini & Aloysius Siow, 2003. "Why Dowries?," American Economic Review, American Economic Association, vol. 93(4), pages 1385-1398, September.
    20. Guilfoos, Todd & Walsh, Jason, 2023. "A hedonic study of New England dam removals," Ecological Economics, Elsevier, vol. 203(C).

    More about this item

    Keywords

    H39; R22; R38; R20; J71; Landlord; Rental agent; Utility; Metering cost; Hedonic Price Model; Rent;
    All these keywords.

    JEL classification:

    • H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other
    • R22 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other Demand
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhouse:v:21:y:2012:i:1:p:28-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622881 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.