IDEAS home Printed from https://ideas.repec.org/a/eee/jhouse/v22y2013i1p11-19.html
   My bibliography  Save this article

Estimating household demand for housing attributes in rent-controlled markets

Author

Listed:
  • Van Ommeren, Jos
  • Graaf-de Zijl, Marloes

Abstract

We estimate the household’s marginal willingness to pay for housing attributes in the rent-controlled sector, so where rents are not freely market determined. The application of hedonic price approaches to obtain estimates of the household’s value of housing characteristics is then invalid. We apply an alternative estimation approach based on residential mobility. In our application, we focus on the households’ willingness to pay for number of rooms as well as the willingness to pay to avoid a long commuting distance. Our estimates appear plausible. For example, for households in the rent-controlled sector are willing to pay about 7% of their household income for an additional room. The implied marginal costs of commuting are about €0.17–€0.23 per (one-way) kilometre.

Suggested Citation

  • Van Ommeren, Jos & Graaf-de Zijl, Marloes, 2013. "Estimating household demand for housing attributes in rent-controlled markets," Journal of Housing Economics, Elsevier, vol. 22(1), pages 11-19.
    • Handle: RePEc:eee:jhouse:v:22:y:2013:i:1:p:11-19
    DOI: 10.1016/j.jhe.2013.02.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1051137713000077
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhe.2013.02.003?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. Manning, Alan, 2003. "The real thin theory: monopsony in modern labour markets," Labour Economics, Elsevier, vol. 10(2), pages 105-131, April.
    2. Koning, Ruud H. & Ridder, Geert, 1997. "Rent assistance and housing demand," Journal of Public Economics, Elsevier, vol. 66(1), pages 1-31, October.
    3. Sheppard, Stephen, 1999. "Hedonic analysis of housing markets," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 41, pages 1595-1635, Elsevier.
    4. Jos Van Ommeren & Gerard J. Van Den Berg & Cees Gorter, 2000. "Estimating the Marginal Willingness to Pay for Commuting," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 541-563, August.
    5. van Ommeren, Jos & Wentink, Derk & Dekkers, Jasper, 2011. "The real price of parking policy," Journal of Urban Economics, Elsevier, vol. 70(1), pages 25-31, July.
    6. Van Ommeren, Jos & Koopman, Marnix, 2011. "Public housing and the value of apartment quality to households," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 207-213, May.
    7. Edward L. Glaeser & Erzo F. P. Luttmer, 2003. "The Misallocation of Housing Under Rent Control," American Economic Review, American Economic Association, vol. 93(4), pages 1027-1046, September.
    8. Gibbons, Stephen & Manning, Alan, 2006. "The incidence of UK housing benefit: Evidence from the 1990s reforms," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 799-822, May.
    9. Bartik, Timothy J. & Butler, J. S. & Liu, Jin-Tan, 1992. "Maximum score estimates of the determinants of residential mobility: Implications for the value of residential attachment and neighborhood amenities," Journal of Urban Economics, Elsevier, vol. 32(2), pages 233-256, September.
    10. Larsen, Morten Marott & Pilegaard, Ninette & Ommeren, Jos Van, 2008. "Congestion and residential moving behaviour," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 378-387, July.
    11. Timothy J. Gronberg & W. Robert Reed, 1994. "Estimating Workers' Marginal Willingness to Pay for Job Attributes Using Duration Data," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 911-931.
    12. Patrick Bajari & C. Lanier Benkard, 2005. "Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1239-1276, December.
    13. Van Ommeren, Jos & Fosgerau, Mogens, 2009. "Workers' marginal costs of commuting," Journal of Urban Economics, Elsevier, vol. 65(1), pages 38-47, January.
    14. Harald Dale‐Olsen, 2006. "Estimating Workers' Marginal Willingness to Pay for Safety using Linked Employer–Employee Data," Economica, London School of Economics and Political Science, vol. 73(289), pages 99-127, February.
    15. Richard Arnott, 1995. "Time for Revisionism on Rent Control?," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 99-120, Winter.
    16. P. C. Cheshire & E. S. Mills (ed.), 1999. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 3, number 3.
    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. GLUMAC Brano & DES ROSIERS François, 2018. "Real estate and land property automated valuation systems: A taxonomy and conceptual model," LISER Working Paper Series 2018-09, Luxembourg Institute of Socio-Economic Research (LISER).
    2. Rohayu Ab Majid & Rosli Said, 2015. "Public Preferences towards Residential Placement in a Township Area: Case Study of Malaysia," LARES lares_2015_1196-1386-1-rv, Latin American Real Estate Society (LARES).
    3. Mark A. C. Kattenberg & Wolter H. J. Hassink, 2017. "Who Moves Out of Social Housing? The Effect of Rent Control on Housing Tenure Choice," De Economist, Springer, vol. 165(1), pages 43-66, March.
    4. Duo Chai & Shunru Li & Pengyuan Zhang, 2024. "How Do “One-Time Bidding, Average Price Win” Land Auction Rules Affect Land Prices: A Quasinatural Experiment in Suzhou, China," Land, MDPI, vol. 13(11), pages 1-28, October.

    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. Van Ommeren, Jos & Koopman, Marnix, 2011. "Public housing and the value of apartment quality to households," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 207-213, May.
    2. Mark A. C. Kattenberg & Wolter H. J. Hassink, 2017. "Who Moves Out of Social Housing? The Effect of Rent Control on Housing Tenure Choice," De Economist, Springer, vol. 165(1), pages 43-66, March.
    3. Van Ommeren, Jos & Fosgerau, Mogens, 2009. "Workers' marginal costs of commuting," Journal of Urban Economics, Elsevier, vol. 65(1), pages 38-47, January.
    4. Van Ommeren, Jos N. & Van der Vlist, Arno J., 2016. "Households' willingness to pay for public housing," Journal of Urban Economics, Elsevier, vol. 92(C), pages 91-105.
    5. Jos Van Ommeren & Mihails Hazans, 2008. "Workers' Valuation of the Remaining Employment Contract Duration," Economica, London School of Economics and Political Science, vol. 75(297), pages 116-139, February.
    6. Giovanni Russo & Jos Ommeren & Piet Rietveld, 2012. "The university workers’ willingness to pay for commuting," Transportation, Springer, vol. 39(6), pages 1121-1132, November.
    7. Borghorst, Malte & Mulalic, Ismir & van Ommeren, Jos, 2021. "Commuting, Children and the Gender Wage Gap," Working Papers 15-2021, Copenhagen Business School, Department of Economics.
    8. Geraci, Andrea & L. Bryan, Mark, 2016. "Non-standard work: what’s it worth? Comparing alternative measures of workers’ marginal willingness to pay," ISER Working Paper Series 2016-12, Institute for Social and Economic Research.
    9. Dauth, Wolfgang & Haller, Peter, 2016. "The valuation of changes in commuting distances: an analysis using georeferenced data," IAB-Discussion Paper 201643, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Borghorst, Malte & Mulalic, Ismir & van Ommeren, Jos, 2024. "Commuting, gender and children," Journal of Urban Economics, Elsevier, vol. 144(C).
    11. Duco Vos & Evert Meijers & Maarten Ham, 2018. "Working from home and the willingness to accept a longer commute," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 375-398, September.
    12. StÈphane Bonhomme & GrÈgory Jolivet, 2009. "The pervasive absence of compensating differentials," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(5), pages 763-795.
    13. Tikoudis, Ioannis & Verhoef, Erik T. & van Ommeren, Jos N., 2018. "Second-best urban tolls in a monocentric city with housing market regulations," Transportation Research Part B: Methodological, Elsevier, vol. 117(PA), pages 342-359.
    14. Gimenez-Nadal, José Ignacio & Molina, José Alberto & Velilla, Jorge, 2024. "Commuting, Wages, and Household Behavior," IZA Discussion Papers 17128, Institute of Labor Economics (IZA).
    15. Stockton, Isabel & Bergemann, Annette & Brunow, Stephan, 2016. "There And Back Again: Women's Marginal Commuting Costs," VfS Annual Conference 2016 (Augsburg): Demographic Change 145919, Verein für Socialpolitik / German Economic Association.
    16. Meekes, Jordy & Hassink, Wolter H.J., 2019. "The role of the housing market in workers′ resilience to job displacement after firm bankruptcy," Journal of Urban Economics, Elsevier, vol. 109(C), pages 41-65.
    17. Dauth, Wolfgang & Haller, Peter, 2020. "Is there loss aversion in the trade-off between wages and commuting distances?," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    18. Jan-Erik Swärdh & Staffan Algers, 2016. "Willingness to accept commuting time within the household: stated preference evidence," Transportation, Springer, vol. 43(2), pages 219-241, March.
    19. Meekes, Jordy & Hassink, Wolter, 2017. "The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy," IZA Discussion Papers 10894, Institute of Labor Economics (IZA).
    20. Yinger, John, 2015. "Hedonic markets and sorting equilibria: Bid-function envelopes for public services and neighborhood amenities," Journal of Urban Economics, Elsevier, vol. 86(C), pages 9-25.

    More about this item

    Keywords

    Rent control; Willingness to pay;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

    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:22:y:2013:i:1:p:11-19. 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.