BICEPS/SSE Riga Research Seminar: Private rental housing market underdevelopment: life cycle model simulations for Poland

Abstract: The share of private rental housing market in Central and Eastern European countries is low. With a survey data from Poland, I show that strong tenure preferences of households toward owning can be attributed to both economic and psychological factors. Building on these findings, I develop a life-cycle model and I conduct counterfactual simulations to evaluate how changes in the structure of the rental market affect its size. I show that in the alternative scenario, which assumes (i.) a change in the quality of rental services, (ii.) lowering rental prices and (iii.) diminishing fiscal incentives to own, the size of the private rental market is significantly higher, which leads to welfare gains for poor households.

Michał Rubaszek is the Assistant Professor at the Warsaw School of Economics. He worked as an economic Advisor in Narodowy Bank Polski (Research Department) as well as expert in the European Central Bank (DG Economics). Michał Rubaszek holds a Ph.D. degree in economics, obtained at the Warsaw School of Economics. His research interest cover international economics, forecasting, heterogeneous agent models and exchange rate economics. He published i.a. in the Journal of International Economics, International Journal of Forecasting, Journal of Money, Credit and Banking, Journal of Economic Surveys, Macroeconomic Dynamics and the presented article is forthcoming in the Baltic Journal of Economics.