CORRESPONDENCE - WS-1 OPPOSITION

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5.4 Model Estimates Table 4 shows the parameter estimates of the model. Panel A reports the parameters mea- sured in rent equivalent dollar units, with the exception of the transfer payments, which are measured in actual dollar amounts." Panel B reports the estimates in units of migra- tion elasticities. We will focus on the estimates in Panel A. Normalizing the coefficient on exponential rents to 1, we identify the standard deviation of tenants' idiosyncratic shocks to their location preferences. We find that young renters have annual location taste shocks with a standard deviation equivalent to $7,411. Mature renters face location shocks with a 12.7% lower standard deviation. These estimates are consistent with our previously dis- cussed hypothesis that young renters' migration decisions are more driven by idiosyncratic shocks than older households. Turning to the magnitudes of the tenant buyouts, we find young renters receive $1.631 more dollars from their landlords for each additional $1 below market their rent is. Mature renters face similar impact of $1.404. We also find buyout offers are larger as tenants live in their zipcodes longer. For each additional year a young (mature) tenant lives in their zipcode, they receive $164 ($141) additional dollars in the buyout offer from their landlord. Finally, we find mature tenants receive larger buyout offers overall by $70,702. This may reflect that landlords expect older tenants to remain in their apartments for the very long term. Along the same lines, to the extent that these transfers reflect evictions, landlords would be more incentivized to evict older renters. To get a better sense of the magnitudes of these buyout payments, Figure 14 plots the average buyout to young tenants offered in each year in the data, across all tenants and neighborhoods. By 2010, the average offer to tenants who still remain at their 1994 address is just over $30,000. Figure 15 plots the heterogeneity across zipcodes in mean buyout offers, highlighting that some zipcodes experience much large rent increases than others over this time period. In the most expensive zipcode, the average buyout in 2010 is just about $40,000, while in the cheapest zipcode the mean buyout offer is 16These are measured at the mean rent paid by rent -controlled households, $2350. 33