A theoretical and empirical analysis of the length of residency discount in the rental housing market

J. Luis Guasch, Robert C. Marshall

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

We present an analysis of occupancy discounts and suggest a decomposition of the discount into two components, a "sit" discount and a length of residency discount. Data from the national longitudinal survey of the Annual Housing Survey in which 75,000 housing units from around the United States were followed from 1974 to 1977 are used to obtain consistent and efficient estimates of those discounts. The econometric models account for censoring in the data by endogenously treating the tenant's staying decision. The estimation indicates that neither discount is significant. This result is contrary to the commonly accepted result in the urban literature that landlords offer discounts to their current tenants when contracts are renegotiated.

Original languageEnglish (US)
Pages (from-to)291-311
Number of pages21
JournalJournal of Urban Economics
Volume22
Issue number3
DOIs
StatePublished - Nov 1987

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Urban Studies

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