Sleeping with Strangers: Estimating the Impact of Airbnb on the Local Economy

52 Pages Posted: 3 Feb 2020

See all articles by Suman Basuroy

Suman Basuroy

University of Texas at San Antonio - College of Business

Yongseok Kim

The University of Texas at San Antonio

Davide Proserpio

Marshall School of Business, University of Southern California

Date Written: January 9, 2020

Abstract

We study the effect of Airbnb on restaurant revenue in the state of Texas using a difference in difference strategy that exploits the geographical and temporal variation of Airbnb’s entry in Texas to show that a 10% increase in Airbnb listings is associated with a 0.05% increase in restaurant revenue. At the sample average year-over-year Airbnb growth, this translates to a 5% contribution to the average year-over-year growth in restaurant revenue. Moreover, we show that these results are driven by zipcodes traditionally not considered touristy. Our results suggest that home-sharing platforms like Airbnb can support local economies through the redistribution of travelers across different areas of the city they enter.

Keywords: Sharing Economy, Peer-To-Peer Markets, Airbnb, Restaurant Revenue, Local Economy

Suggested Citation

Basuroy, Suman and Kim, Yongseok and Proserpio, Davide, Sleeping with Strangers: Estimating the Impact of Airbnb on the Local Economy (January 9, 2020). Available at SSRN: https://ssrn.com/abstract=3516983 or http://dx.doi.org/10.2139/ssrn.3516983

Suman Basuroy

University of Texas at San Antonio - College of Business ( email )

San Antonio, TX 78249
United States

Yongseok Kim (Contact Author)

The University of Texas at San Antonio ( email )

ONE UTSA Circle
San Antonio, TX 78249
United States

Davide Proserpio

Marshall School of Business, University of Southern California ( email )

701 Exposition Blvd
Los Angeles, CA Los Angeles 90089
United States

HOME PAGE: http://faculty.marshall.usc.edu/Davide-Proserpio/

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