Research on rent prices
Every year, the winners of the thesis prize are announced at Maastricht University's Dies Natalis. This year, Alumnus Matthijs Korrevaar was among them. The thesis prizes are awarded to master’s students who have written an outstanding thesis. In his thesis, Matthijs investigated how rents in several European cities have developed over the last 500 years. “You often hear people say that the rents are rising. But if you look at the long term, you’ll discover that rents have become much more affordable.”
He was always a bit of an oddity amongst his fellow Economics students. “My thesis is a combination of economics and history. They don’t really teach a lot of history at the School of Business and Economics. That’s something that I have always pursued on my own because I find it interesting,” says Matthijs. And doing something you think is interesting is important, he adds. “A topic you are passionate about is the main ingredient for a good thesis.”
Hunting for information
In his thesis, Matthijs investigated how rents have developed in a number of large European cities from 1500 until today. “There were some studies on this topic and my thesis supervisor had some information as well, but we didn’t really have a big overview. Most historians only looked at a specific period: from 1500 to 1700, for example.”
Matthijs scoured different databases and archives in search of information about rents. “I started by sending emails to a number of historians that had conducted studies into rents in London, Paris, Amsterdam and Belgian cities such as Bruges, Ghent and Brussels. Most of these people had died, though, so that didn’t really help. After that, I went to several libraries and archives to look for information.”
Comparing apples and oranges
Eventually, Matthijs managed to gather a sizable amount of data: about 250,000 rents in total. Based on this information, he formulated a rent index for every city. “A house from the 1500s differs from the houses we have today in many respects, so I used a technique that takes the quality differences between the houses into account. With this technique, I ensure that I’m not comparing apples and oranges.”
After he had processed all the information, he made a surprising discovery. “Two weeks before my defence, I looked at the combined results and I discovered that the rents had not risen as fast as incomes in almost every city. So rents have become much more affordable in recent years.” In Belgium, the improvements were spectacular. “Antwerp was the New York of the 16th century. Rents were exceptionally high back then. If you take inflation into account, you see that rents in Antwerp have actually become cheaper since 1500.”
The completion of his master’s thesis was really only the beginning of Matthijs’ research project. He is currently doing a PhD on the same topic. This time, he plans on including even more information. He is still very excited about this topic and would like to get to the bottom of it. “Politicians and policymakers often use the housing expense ratio to calculate the percentage of our income that is spent on housing. The housing expense ratio has risen over the past 150 years. In my thesis, I show that this increase is largely due to the fact that we have started to live more luxuriously, not because our rent has become more expensive. This means that the housing expense ratio is not a good way to measure the affordability of housing. Yet, many party programmes - for example- still use the housing expense ratio to express the extent to which the affordability of housing is threatened. Based on history and on all of the data I have gathered, I can draw lessons for society. I do this because I am curious, but research becomes even more valuable when it’s useful for others as well.”
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