Estimating the impact of Airbnb on the local economy: Evidence from the restaurant industry

45 Pages Posted: 3 Feb 2020 Last revised: 23 Sep 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: July 7, 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 1% increase in Airbnb listings is associated with a 0.01% increase in restaurant revenue. Moreover, this increase is revenue is driven, at least in part, by an increase in restaurant demand. Finally, we show that the positive effect of Airbnb is more pronounced for independent restaurants and less commercial—and therefore with less economic activity—zipcodes. Overall, our results provide evidence that home-sharing platforms like Airbnb can increase economic activity for businesses and in neighborhoods that are more likely to need it most.

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

Suggested Citation

Basuroy, Suman and Kim, Yongseok and Proserpio, Davide, Estimating the impact of Airbnb on the local economy: Evidence from the restaurant industry (July 7, 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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