Peak-Bust rental spreads

• 成果类型: Article
• 署名作者: Giacoletti, Marco; Parsons, Christopher A.
• 署名单位: University of Southern California
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.05.061
• 发表日期: 2022
• 页码: 504-526
• 关键词: Distorted beliefs; prospect theory; liquidity constraints; Residential rents

摘要

Landlords appear to use stale information when setting rents. Among over 43,0 0 0 California rental houses in 2018-2019, those last purchased during 20 05-20 07 (the peak) rent for 2-3% more than those purchased during 2008-2010 (bust). Neither house nor landlord characteristics explain this peak-bust rental spread. To clarify the mechanism, we test cross-sectional predictions from a simple theory of rent-setting. We find empirical support for both reference dependence and distorted beliefs. In the first, monthly payments establish (recurring) reference points, against which gains or losses are measured. In the second, past sales prices distort landlords' current estimates of house values/rents. (c) 2021 Elsevier B.V. All rights reserved.