A Hedonic Analysis of Rent and Rental Revenue in the Subsidised and Unsubsidised Housing Sectors in Geneva

Abstract

In this paper, an analysis is made of what would be the rent difference for the tenants of subsidised units if these units were rented as unsubsidised units. Furthermore, the existence of any pecuniary disadvantage for the owner of a subsidised unit is investigated by considering his rental revenue (i.e. the amount paid by the tenant and the subsidy). It is found that there exists a premium between an unsubsidised and a subsidised unit when using the amount paid by the tenant (i.e. the rent) as the dependent variable. Also, the subsidy system in Geneva has an influence on the pricing of each characteristic of a unit. Furthermore, it is found that when using rental revenue as the dependent variable, both sub-samples can be used in a single hedonic equation. Thus, owners of subsidised units are not at a disadvantage due to the granting of a subsidy. As a result, Geneva's subsidy system matches the goals of agents on both the demand and supply sides.