Rents and Quality of Life in Eastern Germany

The rent levels between East- and Westgermany differ less than one Euro on average. This difference seems very slow regarding the persistant economic disparities and high vacancy rates in East-Germany. Based on the assumtion, that income and life quality aspects have an impact on the local rent level a set of variables is regressed on the rent of several housing quality segments in a cross-section analysis at the community-level. The regression contains demographic, economic and housing-market-related variables and a dummy variable for east germany. It incorporates hypotheses about a special supplier structure and several market interventions that are related to the transformation process from socialistic into market economic structures after the reunification in the 1990s. The results show a significant positive coeficiant for the east german dummy in two segments of the housing stock. Further Research about the reasons for the extra charge are important, because theese findings may be responsible for the continous out migration from East Germany.

10. October 2008

Authors Dominik Weiß

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