42 Pages Posted: 25 Jul 2017
Date Written: July 21, 2017
We assess the impact of home-sharing on residential house prices and rental rates. Using a comprehensive dataset on Airbnb listings from the whole United States, we regress zipcode level house prices and rental rates on the number of Airbnb listings, controlling for endogeneity using a shift-share instrumental variable strategy. We find that a 10% increase in Airbnb listings leads to a 0.39% increase in rents and a 0.64% increase in house prices. Moreover, we find that the effect of Airbnb is smaller in zipcodes with a larger share of owner-occupiers, suggesting that it is the absentee landlords who are on the margin of substituting their homes away from the rental market and into Airbnb. We present a simple model that rationalizes these findings.
Keywords: Sharing Economy, Peer-To-Peer Markets, Housing Markets, Airbnb
JEL Classification: R31, L86
Suggested Citation: Suggested Citation
Barron, Kyle and Kung, Edward and Proserpio, Davide, The Sharing Economy and Housing Affordability: Evidence from Airbnb (July 21, 2017). Available at SSRN: https://ssrn.com/abstract=3006832