CORRESPONDENCE - WS-1 OPPOSITION

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$5,012. In terms of decomposition, most of the benefits from the rent control law came from pro- tection against rent increases and transfers." Respectively, protection against rent increases constituted 44.2% of the total benefit and transfers constituted 30.2% of the total. Lower moving costs, both fixed and variable, were 13.5% of the total. Increased neighborhood capital constituted only small fraction of the total benefit at 1.2%. The welfare benefits from increased amenity values were negligible. Interestinly, we find increased utility from the utility value of one's idosyncratic preference equal to 11.2% of the welfare gain. This likely due to the fact that we found some low neighborhood capital houseohlds were more likley to move due to rent control, allowing them to over come moving costs and live in a location that best suites their idiosyncratic preference. The benefits of the rent control expansion were smaller for younger households, although still large. That they are smaller is consistent with our estimate that younger households receive larger idiosyncratic shocks, which leads to more frequent moving and thus smaller benefits from rent control protections. Younger households are also estimated to receive smaller transfers. Cumulative welfare benefits for these households totaled $41,121, reflecting an annual average of $2,285. Similar to older households, the benefits were front loaded. Younger households received cumulative benefits of $32,960 during the 1995-2003 period and cumulative benefits of $8,162 during the 2004-2012 period. Annual averages were $3,662 and $907 respectively. Also similar to older households, most of the benefits came from protection against rent increases and transfers, constituting 79.6% and 45.4% respectively over the total period. The fraction due to moving costs is much smaller for younger households, at only 8%. Note this reinforces the idea that, due to a higher variance if idiosyncratic shocks, ,younger 18The model assumes that all observed moves are rational choices. The transfers we estimate are those which rationalize the observed empirical frequencies. It is possible that some of the moves we see in the data are forced evictions, rather than the result of negotiations between landlords and tenants over monetary compensation. To the extent that this is the case, our welfare benefits from transfer payments over overstated. However, even in the extreme case where the welfare benefits from transfers are zero, the benefits from protection against rent increases would still be large. 39