The Real Effects of Sharing Economy: Evidence from Airbnb

41 Pages Posted: 12 Feb 2018 Last revised: 19 Mar 2018

Yifei Mao

Cornell University - SC Johnson College of Business - Finance Department

Xuan Tian

Tsinghua University - PBC School of Finance

Kailei Ye

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: January 28, 2018

Abstract

Sharing economy has risen rapidly in recent years, and it imposes several challenges for policy makers. This paper examines how a pioneer of sharing economy — Airbnb — affects local economy. Using venture capital infusions as plausibly exogenous shocks to Airbnb’s expansion into a new county, we find that Airbnb expansion leads to poorer hotel performance in the local county. Meanwhile, Airbnb expansion appears to reduce unemployment rate and increase household income. Further analysis suggests that increased employment is concentrated in industries that are complementary to Airbnb’s business and in employee groups with lower education levels. Our study sheds new light on the real effects of the sharing economy and provides important policy implications for policymakers.

Keywords: Airbnb, Sharing economy, Hotel performance, Unemployment, Venture capital

JEL Classification: G22, G29, D31, J21

Suggested Citation

Mao, Yifei and Tian, Xuan and Ye, Kailei, The Real Effects of Sharing Economy: Evidence from Airbnb (January 28, 2018). Kelley School of Business Research Paper No. 18-15. Available at SSRN: https://ssrn.com/abstract=3111975 or http://dx.doi.org/10.2139/ssrn.3111975

Yifei Mao (Contact Author)

Cornell University - SC Johnson College of Business - Finance Department ( email )

Ithaca, NY 14850
United States

Xuan Tian

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

Kailei Ye

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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