| Author: | Basu, K. Emerson, P. M. |
| Title: | Efficiency pricing, tenancy rent control and monopolistic landlords |
| Journal: | Economica
2003 : MAY, VOL. 70:278, p. 223-232 |
| Index terms: | Economic efficiency Pricing Property finance Rents |
| Language: | eng |
| Abstract: | The paper presents a model of 'tenancy rent control` where rent increases on, and evictions of, sitting tenants are prohibited but nominal rents for new tenants are unrestricted. If there is any inflation, landlords prefer to kate short-staying tenants. If there is no way for landlords to tell a tenant's type, an adverse selection problem arises. If landlords have monoply power, then they may prefer not to raise the rent when there is excess demand for housing. These 'efficiency rents' show that tenancy rent control can give rise to equilibria that look as if there were a flat ceiling on rents. |
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