Hostname: page-component-cd9895bd7-gxg78 Total loading time: 0 Render date: 2025-01-03T21:02:59.661Z Has data issue: false hasContentIssue false
  • English
  • Français

Ownership and rent stigma: two experiments

Published online by Cambridge University Press:  04 December 2020

TAMAR KRICHELI-KATZ  and
ERIC A. POSNER
TAMAR KRICHELI-KATZ
Affiliation:
University of Tel Aviv, Tel Aviv, Israel
ERIC A. POSNER*
Affiliation:
University of Chicago, Chicago, IL, USA
*
*Correspondence to: University of Chicago, Chicago, IL, USA. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

We provide experimental evidence for the existence of “rent stigma,” a preference for owning goods or real estate to renting them. In one experiment, anonymous respondents preferred owning a car or house to renting them, even though the transaction was constructed to be identical in each case in terms of economic payoffs and risk. In a second experiment, a survey of law students who were asked how much they would pay to own rather than rent a laptop found similar results. However, we found little or no evidence for our hypotheses that rent stigma would decline in conditions in which the advantages of renting were made salient. The existence of rent stigma raises concerns that the framing of a transaction in terms of purchasing rather than rent may be used to manipulate consumers.

Type
Article
Information
Behavioural Public Policy , Volume 7 , Issue 2 , April 2023 , pp. 353 - 379
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bracha, A. and Jamison, J. C. (2012), ‘Shifting Confidence in Homeownership: The Great Recession’, Public Policy Discussion Papers, No. 12–14, Federal Reserve Bank of Boston, Boston, MA.CrossRefGoogle Scholar
Dietz, R. D. and Haurin, D. R. (2003), ‘The Social and Private Micro-level Consequences of Homeownership’, Journal of Urban Economics, 54 (3): 401–450.CrossRefGoogle Scholar
DiPasquale, D. and Glaeser, E. L. (1999), ‘Incentives and Social Capital: Are Homeowners Better Citizens?’, Journal of Urban Economics, 45 (2): 354–384.CrossRefGoogle Scholar
Drew, R. B. (2014), ‘Believing in Homeownership: Behavioral Drivers of Housing Tenure Decisions’, JCHS Working Paper W14-3.Google Scholar
Fu, K. (2013), ‘A Review of Housing Tenure Choice’, in Want, J., Ding, Z., Zou, L. and Zuo, J. (eds), Proceedings of the 17th International Symposium on Advancement of Construction Management and Real Estate, Berlin: Springer, 351–360.Google Scholar
Havet, N. and Penot, A. (2010), ‘Does Homeownership Harm Labour Market Performances? A Survey’, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon Working Papers 1012.CrossRefGoogle Scholar
Merrill, T. (2019), ‘The Economics and Law of Leasing’, https://www.law.nyu.edu/sites/default/files/THE%20ECONOMICS%20AND%20LAW%20OF%20LEASING%20%2314.pdf. Accessed on 2020-06-11.Google Scholar
Nash, J. R. and Stern, S. M. (2010), ‘Property Frames’, Washington University Law Review, 87: 449.Google Scholar
Oswald, A. (1996), ‘A Conjecture on the Explanation for High Unemployment in the Industrialized Nations: part 1’, University of Warwick Economic Research Papers 475.Google Scholar
Posner, E. and Weyl, G. (2018), Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Princeton University Press.Google Scholar
Reb, J. and Connolly, T. (2007), ‘Possession, Feelings of Ownership and the Endowment Effect’, Judgment and Decision Making, 2, 107−114.CrossRefGoogle Scholar
Reid, C. (2014), ‘To Buy or Not to Buy? Understanding Tenure Preferences and the Decision-Making Processes of Lower-Income Households’, Joint Center for Housing Studies Working Paper, Harvard University, June 2013.Google Scholar
Sunstein, C. (2016), ‘Fifty Shades of Manipulation’, Journal of Marketing Behavior, 1 (3–4): 213–244.CrossRefGoogle Scholar
Thaler, R. (1980), ‘Toward a Positive Theory of Consumer Choice’, Journal of Economic Behavior and Organization, 1: 39–60.CrossRefGoogle Scholar
Van Ommeren, J. and Van Leuvensteijn, M. (2005), ‘New Evidence of the Effect of Transaction Costs on Residential Mobility’, Journal of Regional Science, 45 (4): 681–702.CrossRefGoogle Scholar