Zhiling Wang (Erasmus University Rotterdam): “Identifyinghousing preferences in regulated markets: Evidence from waiting lists.”

Abstract:
In many markets, goods are not allocated based on prices. A prominent example is public housing that is typically allocated based on waiting times. Using a dynamic framework, we show that these waiting times are informative on household preferences regarding the quality of public housing. We apply this framework to estimate the internal and external effects of a large-scale policy in the Netherlands to improve public housing. By estimating unconditional quantile regressions, we show that public housing tenants have a strong preference to reside in newly-built housing units and positively value new public housing units nearby. In addition, we find that owner-occupying residents only weakly value nearby newly-built public housing. These results emphasise that the welfare benefits of improvements in public housing are likely to be underestimated if these effects on households residing in the regulated public housing sector are not taken into account.