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households optimally choose to move more often. The fraction due to neighborhood capital <br />is once again small, constituting just 2.6% for the average. Welfare benefits due to increased <br />amenity values now reflect a small, but non -negligible, fraction of the total benefit at 2.6%. <br />Finally, the young face a substantial welfare loss due to living in places that are worse <br />matches to their idiosyncratic preference under rent control, equal to -37.2%. This reflects <br />that to stay in one's apartment to benefit from below market rents, one must give up living <br />in the best apartment and location that suites one's preferences. Our estiamtes shows that <br />idosyncratice preference variaince is higher for the young, making giving up the match value <br />a larger sacrifice. <br />We aggregate these numbers over the entire population of renters impacted by the rent <br />control law. The aggregate welfare benefits are very large. Older households received a <br />cumulative benefit of $4.440 billion dollars over the entire period, while younger households <br />received a cumulative benefit of $2.64 billion dollars. Across the entire population, the <br />aggregate benefit was $7.085 billion dollars, reflecting an annual average of $394 million <br />dollars. Note also that these welfare numbers are only for the 1994 population impacted by <br />the rent control expansion. It does not take into account the welfare benefits for renters who <br />moved into the impacted properties in later years, which presumably were also quite large. <br />6.2 General Equilibrium Welfare Impact of Reduced Supply <br />We finally turn to evaluating the GE welfare impact of the landlord supply response. Intu- <br />itively, since landlords reduced supply in response to the 1994 law, as was shown in Section <br />4.2, average San Francisco rents were higher than they otherwise would have been. Using <br />our structural framework, we quantify the magnitude of this cost. <br />6.2.1 Derivations <br />We evaluate the welfare impact relative to the 1993 steady state, prior to the introduction <br />of the law change. Aggregate welfare in this steady state is given by: <br />40 <br />