Democratizing the Opportunities: Who Benefits from the Airbnb Market?

38 Pages Posted: 14 Nov 2019 Last revised: 29 Sep 2021

See all articles by Abdollah Farhoodi

Abdollah Farhoodi

University of Toronto - Department of Economics

Date Written: August 18, 2021

Abstract

Peer-to-peer markets allow small suppliers to enter markets traditionally occupied by large firms and provide a potential decentralized distribution of opportunities. This paper investigates how these opportunities are distributed across agents and affected by government regulations. Using daily panel data of Airbnb rentals in Chicago, I develop an individual-level multinomial logit model to estimate consumer and producer surpluses across differentiated agents. The results find higher surpluses for low-income property owners but indicate a disproportionate concentration of welfare in high-income neighborhoods. The counterfactual analysis shows that restricting institutional hosts reinforces this concentration. However, increasing tax rates potentially helps redistribute welfare.

Keywords: Peer-to-Peer Markets, Demand Estimation, Welfare Distribution

JEL Classification: R30, L1, D31

Suggested Citation

Farhoodi, Abdollah, Democratizing the Opportunities: Who Benefits from the Airbnb Market? (August 18, 2021). Available at SSRN: https://ssrn.com/abstract=3480518 or http://dx.doi.org/10.2139/ssrn.3480518

Abdollah Farhoodi (Contact Author)

University of Toronto - Department of Economics ( email )

150 St George
Toronto, Ontario M5S3G7
Canada

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