A new measure of private rental market regulation index and its effects on housing rents: Cross-country evidence
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 24 February 2020
Issue publication date: 16 June 2020
Abstract
Purpose
The purpose of this paper is twofold: first, the authors construct a country-specific time-varying private rental regulation index for 18 developed economies starting from 1973 to 2014. Second, the authors analyze the effects of their index on the housing rental markets across 18 countries and states.
Design/methodology/approach
The authors’ index not only covers 18 developed economies over 42 years but also combines both tenure security and rent laws. The authors’ empirical framework is that of panel regressions with time and country fixed effects.
Findings
The authors’ index sheds further insights on the extent to which rent and tenure security laws have converged over the past 40 years for each economy. Moreover, the authors show three empirical results. First, stringent rent control regimes do lead to lower real rent growth rates than regimes with free rents. Second, soft rent control regimes with time-limited tenure security and minimum duration periods, however, may cause higher rent growth rates than free rent regimes. Third, rent-free regimes do not show significant high real rent appreciation rates.
Originality/value
The authors’ rental regulation index is the first time-varying index that covers more than 18 economies over 40 years.
Keywords
Acknowledgements
We would like to thank the editor and two anonymous referees for their constructive comments and suggestions. The usual disclaimer applies.
Citation
Weber, J.P. and Lee, G. (2020), "A new measure of private rental market regulation index and its effects on housing rents: Cross-country evidence", International Journal of Housing Markets and Analysis, Vol. 13 No. 4, pp. 635-659. https://doi.org/10.1108/IJHMA-12-2019-0118
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited