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Consumers' demand for operational licencing: evidence from Airbnb in Paris

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  • Boto-García, David
  • Balado-Naves, Roberto
  • Mayor, Matías
  • Baños-Pino, José Francisco

Abstract

Since July 2021, Airbnb discloses whether listings in Paris hold a mandatory registration number to legally operate. Grounded on information asymmetries and moral hazard theories, this paper studies consumers' preferences for certifications of legality and minimum quality standards. We exploit the staggered disclosure of licences over time to evaluate the change in demand (reviews) compared to those that continue offering their properties without the licence. Event study and difference-in-differences estimates indicate that reviews for registered hosts increased by around 10 % relative to illegal operators. The effects are increasing over time as the licence becomes more salient to consumers. Our findings suggest that the disclosure of hosts' legal status is an effective mechanism to improve the enforcement of peer-to-peer markets regulation.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:anture:v:100:y:2023:i:c:s0160738323000397
    DOI: 10.1016/j.annals.2023.103566
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    1. Martin Falk & Miriam Scaglione, 2024. "Effects of regulations on the Airbnb market in Geneva," Tourism Economics, , vol. 30(3), pages 615-632, May.

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