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The hidden cost of smoking: Rent premia in the housing market

Cigdem Gedikli Orcid Logo, Robert Hill Orcid Logo, Sasha Talavera Orcid Logo, Okan Yilmaz Orcid Logo

Real Estate Economics

Swansea University Authors: Cigdem Gedikli Orcid Logo, Sasha Talavera Orcid Logo, Okan Yilmaz Orcid Logo

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Abstract

In this paper, we provide novel evidence on the additional costs associated with smoking. While it may not be surprising that smokers pay a rent premium, we are the first to quantify the size of this premium. Our approach is innovative in that we use text mining methods that extract implicit informa...

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Published in: Real Estate Economics
ISSN: 1080-8620 1540-6229
Published: Wiley 2022
Online Access: Check full text

URI: https://cronfa.swan.ac.uk/Record/cronfa60149
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Abstract: In this paper, we provide novel evidence on the additional costs associated with smoking. While it may not be surprising that smokers pay a rent premium, we are the first to quantify the size of this premium. Our approach is innovative in that we use text mining methods that extract implicit information on landlords’ attitudes to smoking directly from Zoopla UK rental listings. Applying hedonic, matching and machine-learning methods to the text-mined data, we find a positive smoking rent premium of around 6 percent. This translates into £14.40 of indirect costs, in addition to £40 of weekly spending on cigarettes estimated for an average smoker in the UK.
Keywords: contracting frictions, hedonic regression, matching, random for-est, rental market, smoking, smoking rent premium, text mining
College: School of Management
Funders: None