Consumer Welfare Implications of Regulating Rent-to-Own Transactions

52 Pages Posted: 18 May 2012

See all articles by Howard Beales

Howard Beales

George Washington University - School of Business

Jeffrey A. Eisenach

NERA Economic Consulting; American Enterprise Institute

Robert E. Litan

Council on Foreign Relations (CFR) - Council on Foreign Relations- Washington D.C.

Date Written: May 16, 2012

Abstract

In this study, we analyze the consumer welfare implications of regulating Rent-to-Own (RTO) transactions. We conclude that the benefits and costs of mandatory disclosure and labeling regulations currently imposed by most states are likely small, and that the effects of imposing a Federal baseline for such regulations would also be relatively small. On the other hand, we conclude that regulations imposed by a handful of states which treat RTO agreements as credit sales, or directly regulate RTO prices, substantially reduce consumer welfare, and should be repealed.

Suggested Citation

Beales, Howard and Eisenach, Jeffrey A. and Litan, Robert E., Consumer Welfare Implications of Regulating Rent-to-Own Transactions (May 16, 2012). Available at SSRN: https://ssrn.com/abstract=2060984 or http://dx.doi.org/10.2139/ssrn.2060984

Howard Beales

George Washington University - School of Business ( email )

Washington, DC 20052
United States

Jeffrey A. Eisenach (Contact Author)

NERA Economic Consulting

1255 23rd Street, NW, Suite 600
Washington, DC 20037
United States
202-448-9029 (Phone)
202-466-3605 (Fax)

HOME PAGE: http://www.nera.com

American Enterprise Institute ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

Robert E. Litan

Council on Foreign Relations (CFR) - Council on Foreign Relations- Washington D.C. ( email )

1777 F Street, NW
Washington, DC 20006
United States

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