The Influence of Facts Versus Puffery: Evidence from Airbnb Property Descriptions

Abstract

We test consumers' responses to written language with an emphasis on the relative importance of objective words (communicating facts) versus subjective words (expressing puffery). We estimate that puffery exerts about 74% of the influence of facts in typical use, an estimate that remains similar across geographies, property types, room types, and degree of subjectivity. Additional word classifications—words that do not have meaning on their own and a class of residual, unclassified words—influence consumers significantly less, around 9% and 23% the influence of objective words, respectively. We find that writing words in all caps further attracts consumers, but this practice exhibits strongly diminishing (possibly negative) returns if applied too liberally. Our estimates exploit quasi-random modifications to Airbnb product descriptions generated by property owners and are robust to the inclusion of a rich set of controls, including machine-learning-estimated indices and alternate fixed-effects specifications.

Keywords: Product search, product descriptions, advertising, language

JEL Classification: M3, M37, D12