Must Agreements Be Kept? Residential Leases during Covid-19∗

Itai Ater; Yael Elster; David Genesove; Eran B. Hoffmann

doi:10.1093/ej/ueac065

Must Agreements Be Kept? Residential Leases during Covid-19∗

Itai Ater, Yael Elster, David Genesove, Eran B. Hoffmann

Department of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one in eight did not pay full rent during the first lockdown in March-April 2020. These households held back two-Thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-Tenant relationship affected payments: Tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contract theories to explain our findings.

Original language	English
Pages (from-to)	477-492
Number of pages	16
Journal	Economic Journal
Volume	133
Issue number	649
DOIs	https://doi.org/10.1093/ej/ueac065
State	Published - 1 Jan 2023

Bibliographical note

Publisher Copyright:
© 2022 The Author(s). Published by Oxford University Press on behalf of Royal Economic Society.

ASJC Scopus subject areas

Economics and Econometrics

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10.1093/ej/ueac065

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abstract = "We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one in eight did not pay full rent during the first lockdown in March-April 2020. These households held back two-Thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-Tenant relationship affected payments: Tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contract theories to explain our findings.",

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AU - Hoffmann, Eran B.

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AB - We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one in eight did not pay full rent during the first lockdown in March-April 2020. These households held back two-Thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-Tenant relationship affected payments: Tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contract theories to explain our findings.

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Must Agreements Be Kept? Residential Leases during Covid-19∗

Abstract

Bibliographical note

ASJC Scopus subject areas

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