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Vacancies and Rent Dispersion in a Stochastic Search Model with Generalized Tenant Demand

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  • Read, Colin

Abstract

The author models imperfect information, derives a downward sloping market demand curve, and explains vacancies in a partial equilibrium model of a rental housing market. Tenants can be completely described by an exogenous demand curve, perhaps arising from differences in income, preferred location, or tastes, and view vacant units based on a stochastic arrival of rental information. Free entry of these landlords induces excess rental housing capacity (equilibrium vacancies). He determines the equilibrium distribution of rents for vacant units, shows that this rent distribution may be discontinuous, and explores the equilibrium vacancy rate to changes in exogenous parameters. The resulting characterization of equilibrium distributions of rents may be amenable to econometric modeling exploring the relationship between market rents and vacancies. Copyright 1997 by Kluwer Academic Publishers

Suggested Citation

  • Read, Colin, 1997. "Vacancies and Rent Dispersion in a Stochastic Search Model with Generalized Tenant Demand," The Journal of Real Estate Finance and Economics, Springer, vol. 15(3), pages 223-237, November.
    • Handle: RePEc:kap:jrefec:v:15:y:1997:i:3:p:223-37
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    1. repec:hal:spmain:info:hdl:2441/9023 is not listed on IDEAS
    2. repec:spo:wpecon:info:hdl:2441/8988 is not listed on IDEAS
    3. Gabriel Desgranges & Étienne Wasmer, 2000. "Appariements sur le marché du logement," Annals of Economics and Statistics, GENES, issue 58, pages 253-287.
    4. Etienne Wasmer, 2005. "Housing market discrimination, housing regulations and intermediaries," Post-Print hal-01053551, HAL.
    5. Olayiwola Oladiran & Adesola Sunmoni & Saheed Ajayi, 2021. "What Property Attributes are important to UK University Students in their Online Accommodation Search?," AfRES 2021-004, African Real Estate Society (AfRES).
    6. repec:hal:spmain:info:hdl:2441/8988 is not listed on IDEAS
    7. Li-Min Hsueh & Hsi-Peng Tseng & Chang-Chiang Hsieh, 2007. "Relationship Between the Housing Vacancy Rate, Housing Price, and the Moving Rate at the Township Level in Taiwan, in 1990 and 2000," International Real Estate Review, Global Social Science Institute, vol. 10(1), pages 119-150.
    8. A. D. H. (Tony) Crook & Ed Ferrari & Peter A. Kemp, 2012. "Knowing the Area: The Management of Market and Business Risks by Private Landlords in Scotland," Urban Studies, Urban Studies Journal Limited, vol. 49(15), pages 3347-3363, November.
    9. repec:spo:wpecon:info:hdl:2441/9023 is not listed on IDEAS
    10. Etienne Wasmer, 2005. "Housing market discrimination, housing regulations and intermediaries," SciencePo Working papers hal-01053551, HAL.
    11. Fowler, Stuart J. & Fowler, Jennifer J. & Seagraves, Philip A. & Beauchamp, Charles F., 2018. "A fundamentalist theory of real estate market outcomes," Economic Modelling, Elsevier, vol. 73(C), pages 295-305.
    12. repec:spo:wpmain:info:hdl:2441/9023 is not listed on IDEAS
    13. Myers, Erica, 2020. "Asymmetric information in residential rental markets: Implications for the energy efficiency gap," Journal of Public Economics, Elsevier, vol. 190(C).
    14. Stuart J. Fowler & Jennifer J. Wilgus, 2011. "An Estimatable DCDP Model of Search and Matching in Real Estate Markets," Working Papers 201105, Middle Tennessee State University, Department of Economics and Finance.
    15. Gabriel Desgranges & Étienne Wasmer, 2000. "Appariements sur le marché du logement," Annals of Economics and Statistics, GENES, issue 58, pages 253-287.
    16. Arno J. van der Vlist & Cees Gorter & Piet Rietveld & Peter Nijkamp, 1998. "Vacancies and residential search in an empirical equilibrium search model," ERSA conference papers ersa98p291, European Regional Science Association.
    17. Yavas, Abdullah, 2001. "Resolution of Demand Uncertainty and Competitive Rent Adjustment," Journal of Housing Economics, Elsevier, vol. 10(4), pages 472-481, December.
    18. repec:hal:wpspec:info:hdl:2441/9023 is not listed on IDEAS
    19. repec:hal:wpspec:info:hdl:2441/8988 is not listed on IDEAS

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