IDEAS home Printed from https://ideas.repec.org/p/ris/vhsuwp/2021_189.html
   My bibliography  Save this paper

Quality Signals on Airbnb: A Hedonic Regression Approach

Author

Listed:
  • Löw, Franziska

    (Helmut Schmidt University, Hamburg)

  • Lüth, Hendrik

    (Helmut Schmidt University, Hamburg)

Abstract

This study aims at identifying guests’ willingness to pay for characteristics of listings on Airbnb, putting a particular emphasis on trust-building information provided by the platform. In order to do so, a hedonic regression model is applied to an extensive dataset that was gathered in 2017 from Airbnb’s website and encompasses listings from seven major German cities, namely Berlin, Munich, Hamburg, Cologne, Dresden, Stuttgart and Frankfurt am Main. Our results regarding tangible characteristics are mostly in line with expectations: Additional space and certain amenities increase the value of a listing. The same holds true for an accommodation’s distance to the city center, although we find proof for a non-linear relationship. Results for trust-building factors on the other hand are mixed. While favorable review scores and membership duration have a positive effect on prices, we cannot establish such a relationship for “superhost” and “verified ID” badges. In contrast to other studies, which are, however, focused on the US, we cannot find price differences linked to hosts’ gender or ethnicity. Using an extended data set that encompasses listings from 2007 to 2008, we furthermore construct hedonic price indices for all seven cities, which suggest supply shifts due to regulatory pressure.

Suggested Citation

  • Löw, Franziska & Lüth, Hendrik, 2021. "Quality Signals on Airbnb: A Hedonic Regression Approach," Working Paper 189/2021, Helmut Schmidt University, Hamburg.
    • Handle: RePEc:ris:vhsuwp:2021_189
    as

    Download full text from publisher

    File URL: https://www.hsu-hh.de/fgvwl/wp-content/uploads/sites/572/2021/05/WP189.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michaël Dewally & Louis Ederington, 2006. "Reputation, Certification, Warranties, and Information as Remedies for Seller-Buyer Information Asymmetries: Lessons from the Online Comic Book Market," The Journal of Business, University of Chicago Press, vol. 79(2), pages 693-730, March.
    2. Chris Nosko & Steven Tadelis, 2015. "The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment," NBER Working Papers 20830, National Bureau of Economic Research, Inc.
    3. Kakar, Venoo & Voelz, Joel & Wu, Julia & Franco, Julisa, 2018. "The Visible Host: Does race guide Airbnb rental rates in San Francisco?," Journal of Housing Economics, Elsevier, vol. 40(C), pages 25-40.
    4. Ert, Eyal & Fleischer, Aliza, 2019. "The evolution of trust in Airbnb: A case of home rental," Annals of Tourism Research, Elsevier, vol. 75(C), pages 279-287.
    5. Benjamin Edelman & Michael Luca & Dan Svirsky, 2017. "Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 1-22, April.
    6. Rasananda Panda & Surbhi Verma & Bijal Mehta, 2015. "Emergence and Acceptance of Sharing Economy in India: Understanding through the Case of Airbnb," International Journal of Online Marketing (IJOM), IGI Global, vol. 5(3), pages 1-17, July.
    7. Han‐Bin Kang & Alan K. Reichert, 1991. "An Empirical Analysis of Hedonic Regression and Grid‐Adjustment Techniques in Real Estate Appraisal," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(1), pages 70-91, March.
    8. Dale-Johnson, David, 1982. "An alternative approach to housing market segmentation using hedonic price data," Journal of Urban Economics, Elsevier, vol. 11(3), pages 311-332, May.
    9. Jon Strand & Mette Vågnes, 2001. "The relationship between property values and railroad proximity: a study based on hedonic prices and real estate brokers' appraisals," Transportation, Springer, vol. 28(2), pages 137-156, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karl Taeuscher & Eric Yanfei Zhao & Michael Lounsbury, 2022. "Categories and narratives as sources of distinctiveness: Cultural entrepreneurship within and across categories," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2101-2134, October.
    2. Dolnicar, Sara, 2019. "A review of research into paid online peer-to-peer accommodation," Annals of Tourism Research, Elsevier, vol. 75(C), pages 248-264.
    3. Petter Törnberg & Letizia Chiappini, 2020. "Selling black places on Airbnb: Colonial discourse and the marketing of black communities in New York City," Environment and Planning A, , vol. 52(3), pages 553-572, May.
    4. Jaeger, Bastian & Sleegers, Willem W.A. & Evans, Anthony M. & Stel, Mariëlle & van Beest, Ilja, 2019. "The effects of facial attractiveness and trustworthiness in online peer-to-peer markets," Journal of Economic Psychology, Elsevier, vol. 75(PA).
    5. Zhu, Hongrui, 2021. "Why a non-discrimination policy upset Airbnb hosts?," Annals of Tourism Research, Elsevier, vol. 87(C).
    6. Farajallah, Mehdi & Hammond, Robert G. & Pénard, Thierry, 2019. "What drives pricing behavior in Peer-to-Peer markets? Evidence from the carsharing platform BlaBlaCar," Information Economics and Policy, Elsevier, vol. 48(C), pages 15-31.
    7. Olga Abramova, 2022. "No matter what the name, we’re all the same? Examining ethnic online discrimination in ridesharing marketplaces," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1419-1446, September.
    8. Daniel W. Elfenbein & Raymond Fisman & Brian McManus, 2019. "The Impact of Socioeconomic and Cultural Differences on Online Trade," NBER Working Papers 26197, National Bureau of Economic Research, Inc.
    9. Lorde, Troy & Jacob, Jadon & Weekes, Quinn, 2018. "Price-Setting Behavior in a Tourism Sharing Economy Accommodation Market: A Hedonic Price Analysis of AirBnB Hosts in the Caribbean," MPRA Paper 95475, University Library of Munich, Germany.
    10. Marchenko, Anya, 2019. "The impact of host race and gender on prices on Airbnb," Journal of Housing Economics, Elsevier, vol. 46(C).
    11. Lee, Jaesun & Shapiro, Dmitry, 2023. "Quality communication via cheap-talk messages in experimental auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 74-107.
    12. Makovi, Michael, 2022. "Is There Discrimination in Property Taxation? Evidence from Atlanta, Georgia, 2010-2016," Journal of Housing Economics, Elsevier, vol. 56(C).
    13. David Dann & Raphael Müller & Ann-Catherin Werner & Timm Teubner & Alexander Mädche & Christoph Spengel, 2022. "How do tax compliance labels impact sharing platform consumers? An empirical study on the interplay of trust, moral, and intention to book," Information Systems and e-Business Management, Springer, vol. 20(3), pages 409-439, September.
    14. Sander WAGNER & Ivaylo D. PETEV, 2019. "The Economic Penalty of Terrorism: Increase in Discrimination Against Arabs and Muslims after Paris Attacks," Working Papers 2019-22, Center for Research in Economics and Statistics.
    15. Deng, Weiguang & Li, Dayang & Zhou, Dong, 2019. "Beauty and Job Accessibility: New Evidence from a Field Experiment," GLO Discussion Paper Series 369, Global Labor Organization (GLO).
    16. Priyanga Gunarathne & Huaxia Rui & Abraham Seidmann, 2022. "Racial Bias in Customer Service: Evidence from Twitter," Information Systems Research, INFORMS, vol. 33(1), pages 43-54, March.
    17. Joseph B. Lipscomb & J. Brian Gray, 1995. "A Connection between Paired Data Analysis and Regression Analysis for Estimating Sales Adjustments," Journal of Real Estate Research, American Real Estate Society, vol. 10(2), pages 175-184.
    18. Yanwen Wang & Chunhua Wu & Ting Zhu, 2019. "Mobile Hailing Technology and Taxi Driving Behaviors," Marketing Science, INFORMS, vol. 38(5), pages 734-755, September.
    19. Tobias Gesche, 2022. "Reference‐price shifts and customer antagonism: Evidence from reviews for online auctions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(3), pages 558-578, August.
    20. Grégory Jolivet & Bruno Jullien & Fabien Postel-Vinay, 2014. "Reputation and Pricing on the e-Market: Evidence from a Major French Platform," PSE Working Papers hal-03460312, HAL.

    More about this item

    Keywords

    airbnb; sharing economy; hedonic models; GLM; rental markets; price indices; real estate;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:vhsuwp:2021_189. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Bekcmann (email available below). General contact details of provider: https://edirc.repec.org/data/egbwhde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.