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@article{ART002597556},
author={Ahn Seryoong and Young-Sang Choi and Byung Chul Min},
title={A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors},
journal={Korea Real Estate Review},
issn={2092-5395},
year={2020},
volume={30},
number={2},
pages={7-19},
doi={10.35136/krer.30.2.1}

TY - JOUR
AU - Ahn Seryoong
AU - Young-Sang Choi
AU - Byung Chul Min
TI - A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors
JO - Korea Real Estate Review
PY - 2020
VL - 30
IS - 2
PB - korea real estate research institute
SP - 7
EP - 19
SN - 2092-5395
AB - In this work, we study how the risk of jeonse deposit losses and the late payments of the monthly rents affect the jeonse-monthly rent conversion rate. Understanding jeonse-monthly rent conversion rates is critical in analyzing the South Korean rental housing market due to the multi-layered contract types of jeonse-monthly rent with security deposit-monthly rent present in the market. Our model of jeonse-monthly rent conversion rate contributes to the literature on balance between the jeonse and monthly rent markets by explicitly modeling such risks and combining it with the previous theoretical framework. The results show that the conversion rate increases along with the jeonse-price ratio, and that the value of the lessors’ put option increases along with the market interest rate.
KW - lease market;jeonse-monthly rent conversion rate;jeonse deposit loss risk;monthly rent risk premium;put option
DO - 10.35136/krer.30.2.1
ER -

Ahn Seryoong, Young-Sang Choi and Byung Chul Min. (2020). A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors. Korea Real Estate Review, 30(2), 7-19.

Ahn Seryoong, Young-Sang Choi and Byung Chul Min. 2020, "A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors", Korea Real Estate Review, vol.30, no.2 pp.7-19. Available from: doi:10.35136/krer.30.2.1

Ahn Seryoong, Young-Sang Choi, Byung Chul Min "A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors" Korea Real Estate Review 30.2 pp.7-19 (2020) : 7.

Ahn Seryoong, Young-Sang Choi, Byung Chul Min. A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors. 2020; 30(2), 7-19. Available from: doi:10.35136/krer.30.2.1

Ahn Seryoong, Young-Sang Choi and Byung Chul Min. "A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors" Korea Real Estate Review 30, no.2 (2020) : 7-19.doi: 10.35136/krer.30.2.1

Ahn Seryoong; Young-Sang Choi; Byung Chul Min. A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors. Korea Real Estate Review, 30(2), 7-19. doi: 10.35136/krer.30.2.1

Ahn Seryoong; Young-Sang Choi; Byung Chul Min. A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors. Korea Real Estate Review. 2020; 30(2) 7-19. doi: 10.35136/krer.30.2.1

Ahn Seryoong, Young-Sang Choi, Byung Chul Min. A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors. 2020; 30(2), 7-19. Available from: doi:10.35136/krer.30.2.1

Ahn Seryoong, Young-Sang Choi and Byung Chul Min. "A Structural Model of the Jeonse Monthly Rent Conversion Rate with the No-Arbitrage Condition of Lessors" Korea Real Estate Review 30, no.2 (2020) : 7-19.doi: 10.35136/krer.30.2.1