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The Effect of Home-Sharing on House Prices and Rents: Evidence from Airbnb

Author

Listed:
  • Kyle Barron

    (National Bureau of Economic Research, Cambridge, Massachusetts 02138;)

  • Edward Kung

    (David Nazarian College of Business and Economics, California State University, Northridge, Northridge, California 91330;)

  • Davide Proserpio

    (Marshall School of Business, University of Southern California, Los Angeles, California 90089)

Abstract

We assess the impact of home-sharing on residential house prices and rents. Using a data set of Airbnb listings from the entire United States and an instrumental variables estimation strategy, we show that Airbnb has a positive impact on house prices and rents. This effect is stronger in zip codes with a lower share of owner-occupiers, consistent with non-owner-occupiers being more likely to reallocate their homes from the long- to the short-term rental market. At the median owner-occupancy rate zip code, we find that a 1% increase in Airbnb listings leads to a 0.018% increase in rents and a 0.026% increase in house prices. Considering the median annual Airbnb growth in each zip code, these results translate to an annual increase of $9 in monthly rent and $1,800 in house prices for the median zip code in our data, which accounts for about one-fifth of actual rent growth and about one-seventh of actual price growth. Finally, we formally test whether the Airbnb effect is due to the reallocation of the housing supply. Consistent with this hypothesis, we find that although the total supply of housing is not affected by the entry of Airbnb, Airbnb listings increase the supply of short-term rental units and decrease the supply of long-term rental units.

Suggested Citation

  • Kyle Barron & Edward Kung & Davide Proserpio, 2021. "The Effect of Home-Sharing on House Prices and Rents: Evidence from Airbnb," Marketing Science, INFORMS, vol. 40(1), pages 23-47, January.
    • Handle: RePEc:inm:ormksc:v:40:y:2021:i:1:p:23-47
    DOI: 10.1287/mksc.2020.1227
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Housing Gotham: The 21st Century So Far (Part I)
      by Jason Barr in Skynomics Blog on 2021-09-27 12:02:57

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    Cited by:

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    2. Mohammed Mardan & Mark J. Tremblay, 2022. "Network Effects: Betwixt and Between," CESifo Working Paper Series 10082, CESifo.
    3. Carrasco-Farré, Carlos & Snihur, Yuliya & Berrone, Pascual & Ricart, Joan Enric, 2022. "The stakeholder value proposition of digital platforms in an urban ecosystem," Research Policy, Elsevier, vol. 51(4).
    4. Časni Anita Čeh & Filić Josipa, 2022. "Tourism housing price nexus," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 8(2), pages 53-65, December.
    5. Gonçalves, Duarte & Peralta, Susana & Pereira dos Santos, João, 2022. "Short-Term Rental Bans and Housing Prices: Quasi-Experimental Evidence from Lisbon," IZA Discussion Papers 15706, Institute of Labor Economics (IZA).
    6. Cong Liang & Matthew Chi Hei Yeung & Alan Kai Ming Au, 2022. "The impact of Airbnb on housing affordability: Evidence from Hong Kong," Environment and Planning B, , vol. 49(3), pages 1048-1066, March.
    7. Viktorija Bobinaite & Inga Konstantinaviciute & Arvydas Galinis & Mária Bartek-Lesi & Viktor Rácz & Bettina Dézsi, 2022. "Energy Sufficiency in the Household Sector of Lithuania and Hungary: The Case of Heated Floor Area," Sustainability, MDPI, vol. 14(23), pages 1-19, December.
    8. Aaron Kolleck, 2021. "Does Car-Sharing Reduce Car Ownership? Empirical Evidence from Germany," Sustainability, MDPI, vol. 13(13), pages 1-17, July.
    9. Maria del Mar Alonso-Almeida, 2023. "Could Failures in Peer to Peer Accommodation Be a Threat to Public Health and Safety? An Analysis of Users Experiences after the COVID-19 Pandemic," IJERPH, MDPI, vol. 20(3), pages 1-14, January.

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