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Platform, Anonymity, and Illegal Actors: Evidence of Whac-a-Mole Enforcement from Airbnb

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  • Jian Jia
  • Liad Wagman

Abstract

Airbnb, a prominent sharing-economy platform, offers dwellings for short-term rent. Despite restrictions, some sellers illegally offer their accommodations, taking advantage of a degree of anonymity proffered by the platform to hide from potential enforcement. We study the extent to which enforcement works in Manhattan, one of the most active short-term rental markets, by testing the effects of two recent enforcement events. We find a negative effect on the number of entire-home listings in Manhattan and positive effects on the prices and occupancies of remaining listings following each enforcement event, which suggests that some illegal listings are withdrawn from the market. We demonstrate evidence suggesting that a portion of withdrawn listings reenter the market under the less enforced listing category of private rooms.

Suggested Citation

  • Jian Jia & Liad Wagman, 2020. "Platform, Anonymity, and Illegal Actors: Evidence of Whac-a-Mole Enforcement from Airbnb," Journal of Law and Economics, University of Chicago Press, vol. 63(4), pages 729-761.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/709243
    DOI: 10.1086/709243
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    Cited by:

    1. Andrew Bibler & Laura Grigolon & Keith F. Teltser & Mark J. Tremblay, 2024. "Identifying Tax Compliance from Changes in Enforcement: Theory and Empirics," CRC TR 224 Discussion Paper Series crctr224_2024_505, University of Bonn and University of Mannheim, Germany.
    2. Rojanakit, Patcharapar & Torres de Oliveira, Rui & Dulleck, Uwe, 2022. "The sharing economy: A critical review and research agenda," Journal of Business Research, Elsevier, vol. 139(C), pages 1317-1334.
    3. Andrew Bibler & Laura Grigolon & Keith F. Teltser & Mark J. Tremblay, 2024. "Identifying Tax Compliance from Changes in Enforcement: Theory and Empirics," CESifo Working Paper Series 10921, CESifo.
    4. Boto-García, David & Balado-Naves, Roberto & Mayor, Matías & Baños-Pino, José Francisco, 2023. "Consumers' demand for operational licencing: evidence from Airbnb in Paris," Annals of Tourism Research, Elsevier, vol. 100(C).

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    More about this item

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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