Chapter 7 — Further Reading

On rent control

Rebecca Diamond, Tim McQuade, and Franklin Qian, "The Effects of Rent Control Expansion on Tenants, Landlords, and Inequality: Evidence from San Francisco," American Economic Review, 2019 The most important recent empirical study of rent control. The authors use a quasi-natural experiment in San Francisco to estimate the effects of rent control on tenant displacement, landlord behavior, and rental supply. Findings: rent control reduces tenant displacement among current tenants but reduces the long-run supply of rental housing by about 15% over 15 years. The most rigorous evidence we have on the topic.

IGM Forum, "Rent Control" poll, 2012 A survey of leading academic economists. About 95% agreed that rent control had had a negative impact on the amount and quality of broadly affordable rental housing in cities that have used it. Useful as a benchmark for what professional consensus looks like (which is rare on most policy questions).

Konstantin Kholodilin and Sebastian Kohl, "Rent Price Control – Yet Another Great Equalizer of Economic Inequalities? Evidence from a Century of German History," DIW Berlin, 2021 A historical look at rent control in Germany. Useful for understanding how rent control has worked in different policy regimes.

Andrew Hayashi, "The Welfare Effects of Rent Control," Yale Law and Economics Research Paper, 2018 A more theoretical look at when rent control might or might not be welfare-improving. Hayashi argues that rent control can be defensible in some narrowly defined circumstances but agrees that the typical implementation is welfare-reducing.

Edward Glaeser, Triumph of the City, Penguin Press, 2011 Glaeser is the most influential urban economist of his generation and an outspoken critic of rent control. The book covers the broader question of housing supply and zoning. We will revisit it in Chapter 36.

On the minimum wage

David Card and Alan Krueger, Myth and Measurement: The New Economics of the Minimum Wage, Princeton University Press, 1995 The book that changed the minimum wage debate. Cited in Chapter 6 and worth re-reading after Chapter 7.

David Neumark and William Wascher, Minimum Wages, MIT Press, 2008 The most thorough critical treatment of the Card-Krueger findings. Cited in Chapter 6.

Arindrajit Dube, T. William Lester, and Michael Reich, "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," Review of Economics and Statistics, 2010 Cited in Chapter 6.

Ekaterina Jardim et al., "Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle," Quarterly Journal of Economics, 2022 The University of Washington Seattle Minimum Wage Study's key paper. Findings: substantial reductions in hours worked, suggesting that wage gains were more than offset by hours losses. The most prominent study suggesting larger negative effects than Card-Krueger.

Sylvia Allegretto, Arindrajit Dube, Michael Reich, and Ben Zipperer, "Credible Research Designs for Minimum Wage Studies: A Response to Neumark, Salas, and Wascher," Industrial and Labor Relations Review, 2017 A methodological response to the Neumark critique. Useful for understanding the technical disputes in the empirical minimum wage literature.

Congressional Budget Office, The Effects on Employment and Family Income of Increasing the Federal Minimum Wage, 2019 and 2021 The CBO's official estimates. Free online at cbo.gov.

IGM Forum, "$15 Minimum Wage" poll, 2019 A survey of leading economists on a $15 federal minimum wage. Useful for seeing the genuine division in expert opinion.

On tax incidence

Joel Slemrod and Jon Bakija, Taxing Ourselves, MIT Press, 2017 (5th edition) The best general-audience book on the U.S. tax system. Slemrod and Bakija explain tax incidence carefully and apply it to real policy debates.

Jonathan Gruber, Public Finance and Public Policy, Worth Publishers, multiple editions The standard intermediate textbook on public finance. The chapter on tax incidence is excellent.

Emmanuel Saez and Stefanie Stantcheva, "A Simpler Theory of Optimal Capital Taxation," Journal of Public Economics, 2018 A more technical paper on how elasticities affect optimal tax design. Read after the Slemrod-Bakija book if you want to go deeper.

On subsidies and the Bennett hypothesis

Grey Gordon and Aaron Hedlund, "Accounting for the Rise in College Tuition," NBER Macroeconomics Annual, 2017 A careful empirical analysis of why college tuition has risen so much. Findings: federal aid does seem to have contributed, supporting the Bennett hypothesis.

Susan Dynarski et al., "An Analysis of the Effects of Federal Student Aid on College Enrollment, Tuition Revenue, and Cost," various papers Dynarski's body of work on student aid effects. Worth reading for a more skeptical view of the Bennett hypothesis.

On price controls and shortages historically

Hugh Rockoff, Drastic Measures: A History of Wage and Price Controls in the United States, Cambridge University Press, 1984 A comprehensive historical look at U.S. wage and price controls (including the WWII era and Nixon's 1971 controls). Useful for understanding what happens when price controls are imposed broadly.

Tyler Cowen, "Price Controls Are Coming!", Marginal Revolution blog, ongoing Cowen has written extensively about modern proposals for price controls (energy, healthcare, etc.) and the lessons of historical experience. His blog is a good ongoing resource.

A reading order recommendation

If you have time for one of the books above, read Slemrod and Bakija's Taxing Ourselves. It's the most useful single book for understanding how tax policy interacts with elasticities in real life.

If you want to go deeper on minimum wage, the Dube papers and the CBO 2021 report together give you the most rigorous current view.

For rent control specifically, the Diamond-McQuade-Qian paper is the single most important recent piece of evidence.

Chapter 8 — Consumer and Producer Surplus — is next. It introduces the formal way to measure how much value a market creates and how government interventions redistribute that value.