The Distributional Impact of the Sharing Economy on the Housing Market

64 Pages Posted: 21 Aug 2021 Last revised: 8 Jan 2022

See all articles by Sophie Calder-Wang

Sophie Calder-Wang

University of Pennsylvania - The Wharton School

Date Written: July 16, 2021

Abstract

I estimate the welfare and distributional impact of the home-sharing platform Airbnb on New York City renters. I develop a structural model of an integrated housing market with two novel features. First, in addition to the traditional long-term rental market, absentee landlords can reallocate their housing units to the newly available short-term rental market. Second, residents can directly host short-term visitors, increasing housing utilization. Overall, renters in NYC suffer a welfare loss of $2.4 billion, where losses from increased rents dominate gains from hosting. Moreover, the increased rent burden falls most heavily on high-income, educated, and white renters. By characterizing winners and losers, this paper provides a framework for evaluating the impact of such technological innovations.

Keywords: Airbnb, Housing Regulation, Digitization, Welfare Economics

JEL Classification: D6, L23, L85, L86, R31

Suggested Citation

Calder-Wang, Sophie, The Distributional Impact of the Sharing Economy on the Housing Market (July 16, 2021). Available at SSRN: https://ssrn.com/abstract=3908062 or http://dx.doi.org/10.2139/ssrn.3908062

Sophie Calder-Wang (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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