The impact on rent from tenant and landlord characteristics and interaction

Owner-occupied and rental housing services are often assumed to be close substitutes, and both house price and rental price indices rely on regressions based on dwelling and spatial attributes. However, while such characteristics are exhaustive in the owner's market, they cannot capture the additional complexity of rental markets. This paper offers an analysis of additional factors that affect rent, such as landlord and tenant characteristics and the landlord-tenant interaction. We examine a novel data set of the Norwegian rental market and obtain substantial improvements in explanatory power by including tenant and landlord characteristics. Additionally, we are able to shed first light on long-standing questions such as the relationship between the scale of the landlord's businesses and rent levels.