Valuing the Welfare Gains of Uber
28 Pages Posted: 2 Jan 2019
Date Written: December 11, 2018
Ridesharing has become ubiquitous throughout the United States. We exploit quasi-experimental variation in the staggered entry of Uber into different metropolitan areas between 2010 and 2016. Using a combination of housing price data from Zillow and social well-being (SWB) data from Gallup, we find that the entry of UberX into a metropolitan area leads to a 3% rise in median housing prices, a 1.5% rise in economic optimism, and a 0.8% rise in life satisfaction. Our estimates are identified based on within-metropolitan comparisons before versus after their entry into the market, conditional on semi-parametric location-specific controls. Using our hedonic pricing elasticity, a back-of-an-envelope calculation suggests that the entry of Uber is associated with a welfare gain of over $633.5 million.
Keywords: housing prices, life satisfaction, ride sharing, Uber, welfare
JEL Classification: E61, H41, L24, R23, R31
Suggested Citation: Suggested Citation