Büchler, Simon; v. Ehrlich, Maximilian; Schöni, Olivier (2021). The amplifying effect of capitalization rates on housing supply. Journal of urban economics, 126, p. 103370. Elsevier 10.1016/j.jue.2021.103370
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We provide empirical evidence that increases in housing rental income lead to a larger supply response than price increases of the same percentage value. We rationalize this differential in supply responsiveness with an amplification mechanism arising from a downward revision of capitalization rates following a rental income increase. We document that the amplification of the housing supply price elasticity is less pronounced in geographically constrained and tightly regulated neighborhoods and areas having more sophisticated investors. Our findings hold valuable lessons for public policies affecting the housing rental income, such as rent control and housing subsidies.
Item Type: |
Journal Article (Original Article) |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics 11 Centers of Competence > Center for Regional Economic Development (CRED) 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Economic Policy and Regional Economics 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Public Economics |
UniBE Contributor: |
Büchler, Simon, v. Ehrlich, Maximilian, Schöni, Olivier |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
ISSN: |
0094-1190 |
Publisher: |
Elsevier |
Language: |
English |
Submitter: |
Melanie Moser |
Date Deposited: |
16 Sep 2021 13:05 |
Last Modified: |
05 Dec 2022 15:53 |
Publisher DOI: |
10.1016/j.jue.2021.103370 |
BORIS DOI: |
10.48350/159370 |
URI: |
https://boris.unibe.ch/id/eprint/159370 |
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