Despite past theory mounting against him, Zhao believes that these government programs may have been necessary and even beneficial for economic recovery during the COVID-19 pandemic. With Levitt Center funding and help from Professor of Economics Steven Wu, Zhao now has the chance to research if his theory is correct.
“Economics is mainly about rational players, and rent control is just not the most rational thing to do,” Zhao said. “I believe that’s true in theory, but in a situation like the pandemic, I think people must argue that if you only think rationally, people are going to get hurt.”
Rent control programs limit rent increases and regulate evictions. Though the economic impact of these programs has been heavily studied, little research has been conducted on their relation to the pandemic. Zhao plans to change that.
His project analyzes the effectiveness of rent control programs through a case study of the 15 most populated U.S. cities during the pandemic. By surveying renters, Zhao hopes to discover if rent control programs reached their target audience and if renters found them effective in accelerating their post-pandemic economic recovery. In addition to evaluating general effectiveness, he will explore how various demographic groups experienced the programs differently.
While Zhao believes that rent control programs caused negative short-term economic impacts, even in the case of the pandemic, he suspects they had some unknown, positive effects. For example, these programs may have contributed to the economic recovery of minority and low-income groups. His research focuses on these groups since they were the most likely to be laid off and face economic hardships during the pandemic, he said.
“I think we need to consider minority and low-income groups when we discuss economics,” Zhao said. “There are negative effects of rent control programs, but they do help people, and that’s important.”
Alan Zhao ’23
Majors: Economics and Mathematics
Hometown: Yichang, China
High School: Delphian School in Sheridan, Ore.
After analyzing his data, Zhao will write a paper relaying his results. He hopes it will offer insight into the cost/benefit of rent control programs, as well as people’s general experiences with them.
“I want to find some supporting evidence that there is a positive side to these programs,” Zhao said. “When people think about economics, a lot of the time, they only think about numbers and rational players. But economics can help people, and it can help us understand real problems in people’s lives.”