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Should we tax vacant dwellings? A search equilibrium model applied to the rental housing market

Authors
Journal
Economics Letters
0165-1765
Publisher
Elsevier
Volume
117
Issue
1
Identifiers
DOI: 10.1016/j.econlet.2012.04.095
Keywords
  • Housing Market
  • Rent Distribution
  • Search Equilibrium
  • Matching

Abstract

Highlights ► This paper studies the rental housing market by using a search equilibrium model. ► We show that the distribution of rent results from the owners’ posting strategy. ► In our model, a tax on vacant dwellings reduces the number of dwellings in the economy. ► The decrease of number of vacant dwellings increases the average rent. ► Consequently, the increase of vacancy costs is partly paid by the tenants.

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