Effects of quality changes in rental housing markets with indivisibilities

This paper presents comparative statics results on a rental housing market model with a finite number of apartments. The apartments are classified into categories based on their housing attributes. The apartments in a given category are treated as equals having the same rent. The main result is that when an improvement occurs in one category, the rent of the category increases, whereas rents of better categories decrease. We compare this result with another comparative statics result, and also with Braid's results in his model with a continuum of housing qualities.