Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240625 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
FAU Discussion Papers in Economics No. 05/2021
Publisher: 
Friedrich-Alexander-Universität Erlangen-Nürnberg, Institute for Economics, Nürnberg
Abstract: 
I estimate the impact of new housing supply on the local rent distribution, exploiting weather shocks during the construction phase as an instrument. New supply decreases rents at all quality levels. Building on a quantitative dynamic model of housing quality and tenure choice, I explain this pattern by secondary housing supply: New supply to the owner-occupier market triggers a cascade of moves in the rental market, freeing up units across the housing quality spectrum. This mechanism has implications for housing policy, the integration of the housing market, and the integration of new- and used-product markets in general.
Subjects: 
secondary markets
market integration
housing markets
rent distribution
dynamic housing choice
JEL: 
D15
D40
R21
R31
Document Type: 
Working Paper

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