The Journal of College and University Student Housing - Volume 41, No. 2 & Volume 42, No. 1 - 80

Although residence halls at some institutions
may be more expensive than housing managed
by private property owners in terms of ﬂoor
space, they can provide ﬁrst-year students a
feeling of security against the potential risks
of living in an unfamiliar location and can
provide various beneﬁts that private property
owners would not offer, such as contributing
to persistence and degree completion and creating opportunities for the positive inﬂuences
of interacting with peers (Kuh, Kinzie, Buckley,
Bridges, & Hayek, 2006; Pascarella & Terenzini, 2005; Pike, Schroeder, & Berry, 1997). In
this sense, it may be rational for students to
live in a residence hall even though it is considerably more costly than other housing. This
cost is referred to as a university premium that
students or their parents are willing to pay over
what they would pay private property owners,
assuming that their housing quality and proximity to campus are the same.
After spending a year on campus, students
have typically made close friends and have
become more familiar with the campus and
community; thus, they are in a much more
informed position to begin looking for new
housing. Some students join a fraternity or
sorority to participate in activities that enrich
their social lives, whereas others move to offcampus housing owned by private property
owners and share larger rooms with friends
(Gumprecht, 2003), where they are free from
the stricter rules and regulations of residence
halls. In searching for new housing, however,
students face different kinds of uncertainties,
including their relationship with the future
property owners (Kashian, 2009).

80

HOUSING DATA
In this study, an econometric approach is used
to investigate the costs of uncertainty in a college-town housing market-in this case, Urbana-Champaign, the home of the University of
Illinois. Among the housing data available for
Urbana-Champaign are two sources of information that enabled the researcher to examine
these issues. First, the University of Illinois
Tenant Union keeps a data set of claims ﬁled
against property owners in Urbana-Champaign (i.e., violations of property owners' obligations under the law or according to the terms
of the lease contract). If, in fact, the number
of claims matters to renters, the rental price of
housing managed by property owners with a
large number of claims should be lower than
the rental price of housing managed by others
with few claims because individuals would
not sign a lease contract with a risky property owner unless the rent was low enough
to compensate for the risk. Estimation results
show that the rental price of housing from
private property owners with more than 10
claims ﬁled against them in the past ﬁve years
was about 10% lower than the rental price of
housing from other property owners.
As a second source, the information on residence halls can be obtained from the website
for University Housing, the university property management agency. University Housing
manages two types of properties: the ﬁrst type
is provided for undergraduate students, and
the second type is designated for graduate students. In principle, all undergraduates are required to live in a residence hall their ﬁrst year
in school unless they live with their families
in the neighborhood, whereas sophomores,
juniors, seniors, and graduate students are not

THE JOURNAL OF COLLEGE AND UNIVERSITY STUDENT HOUSING
The Journal of College and University Student Housing - Volume 41, No. 2 & Volume 42, No. 1

Table of Contents for the Digital Edition of The Journal of College and University Student Housing - Volume 41, No. 2 & Volume 42, No. 1
