HAND-ME-DOWN HOUSING: HOW BUILDING NEW HOMES CAN MAKE EXISTING RENTALS

The ‘repeat rents model’ instead capitalises on the fact that between two appearances in the data, the dwelling has always aged by the amount of time that has passed. [...] Nonetheless, if the rental prices of new rentals entering the market each year were evolving at the same pace as the rental prices of existing rentals, the hedonic model would attribute the rise to market trends rather than an age effect. [...] The difference may be because: • The dwelling fixed effects in the repeat rents model control for more dwelling characteristics than the hedonic model, including the year of build and year of first rental. [...] Sensitivity of results to sample period choice This section discusses the sensitivity of the econometric results to changing the start and end years of the sample. [...] Although this approach suffers from other issues (namely measurement error of rental age), the fact that the coefficients have the same sign in the repeat-rents model provides confidence that the results are not completely being driven by the impacts of time.