This makes sense as helping with a price discrimination scheme which is probably made very complicated legally (if the landlord is a monopolist, then both you and them might prefer that they have a crappy product to offer at low cost, but often it is hard to offer a crappier product for legal reasons) or as a costly signal of poverty (if you are poor you are willing to make your house dirtier in exchange for money—of course most of the costs can also be signaling, since having white walls is a costly signal of wealth). My guess would be these kinds of models are too expressive to have predictive power, but this at least seems like a clean case.
Signaling explanations often seem to have this vaguely counter-intuitive form, e.g. you might think that from a selfish point of view you would want your classes to be more easily graded. But alas...
if the landlord is a monopolist [...] but often it is hard to offer a crappier product for legal reasons
Well, this is public housing, so the landlord is the government and thus is like to both have monopoly power and not be subject to the same laws as a private landlord.
If I guess correctly the reasons why a government would pass a law against renting excessively crappy houses, I don’t think it would exempt itself from it.
This makes sense as helping with a price discrimination scheme which is probably made very complicated legally (if the landlord is a monopolist, then both you and them might prefer that they have a crappy product to offer at low cost, but often it is hard to offer a crappier product for legal reasons) or as a costly signal of poverty (if you are poor you are willing to make your house dirtier in exchange for money—of course most of the costs can also be signaling, since having white walls is a costly signal of wealth). My guess would be these kinds of models are too expressive to have predictive power, but this at least seems like a clean case.
Signaling explanations often seem to have this vaguely counter-intuitive form, e.g. you might think that from a selfish point of view you would want your classes to be more easily graded. But alas...
Well, this is public housing, so the landlord is the government and thus is like to both have monopoly power and not be subject to the same laws as a private landlord.
If I guess correctly the reasons why a government would pass a law against renting excessively crappy houses, I don’t think it would exempt itself from it.