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

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

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

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 languageAmerican English
Pages (from-to)477-492
Number of pages16
JournalEconomic Journal
Volume133
Issue number649
DOIs
StatePublished - 1 Jan 2023

Bibliographical note

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

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