Analysis of price and quantity competition between public and private housing firms in Sweden

Abstract: This bachelor’s thesis concerns the Swedish housing market and how the publicly and privately owned firms may differ in goals, costs, and actions. Building upon a theoretical foundation of different models of competition and the Lerner Index’s measurement of monopoly power, an empirical investigation is made into whether competition on the Swedish housing market mainly expresses itself in price, quantity, or both, as well as how competition may vary across different kinds of municipalities. Using multiple variable OLS regression, it is shown that competition on the Swedish housing market, at least between public and private firms, is conducted in terms of price and not quantity. Median yearly rent is found to decrease as public market ownership concentration increases, and that rents increase slightly with population size, although at different rates depending on the type of municipality. Using an official categorization for distinguishing Swedish municipalities into different levels of urbanization, it is shown that greater urbanization is correlated with higher expected rent at zero public ownership and rents that are less responsive to increases in either local public sector ownership or population increases, relative to rents in rural municipalities.