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The paradox of airbnb, crime and house prices: A reconciliation

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  • Ka Shing Cheung
  • Chung Yim Yiu

Abstract

While in many housing studies, Airbnb is evidenced to be a demand driver that leads to a positive effect on property rents and prices, it is also argued that such tourist accommodation in a neighbourhood causes an increase in criminal activities that weigh on its property values. How can we reconcile such contradictory arguments? This research note aims to use a difference-in-differences model to empirically disentangle the moderating effect of Airbnb on the relationship between crime and house prices. Using the housing transaction data in the two census years of the Auckland Region, New Zealand, we demonstrate that the impact of crime on house prices is contingent on the density of Airbnb. After controlling neighbourhood qualities, such as household incomes, ethnicity concentration and proportion of public housing in each census tract, the effect of crime rate on house prices is negatively moderated by the number of Airbnb listings, especially in apartment-type housing. The result can be interpreted as showing the effects of trespassing-related crime on house prices.

Suggested Citation

  • Ka Shing Cheung & Chung Yim Yiu, 2023. "The paradox of airbnb, crime and house prices: A reconciliation," Tourism Economics, , vol. 29(5), pages 1412-1418, August.
    • Handle: RePEc:sae:toueco:v:29:y:2023:i:5:p:1412-1418
    DOI: 10.1177/13548166221102808
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    References listed on IDEAS

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    1. Bianca Biagi & Claudio Detotto, 2020. "Crime as Tourism Externality," Regional Studies, Taylor & Francis Journals, vol. 48(4), pages 693-709, July.
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    3. Mehmood, Shafaqat & Ahmad, Zahid & Khan, Ather Azim, 2016. "Dynamic relationships between tourist arrivals, immigrants, and crimes in the United States," Tourism Management, Elsevier, vol. 54(C), pages 383-392.
    4. 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.
    5. Garcia-López, Miquel-Àngel & Jofre-Monseny, Jordi & Martínez-Mazza, Rodrigo & Segú, Mariona, 2020. "Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona," Journal of Urban Economics, Elsevier, vol. 119(C).
    6. Horn, Keren & Merante, Mark, 2017. "Is home sharing driving up rents? Evidence from Airbnb in Boston," Journal of Housing Economics, Elsevier, vol. 38(C), pages 14-24.
    7. Stephen Sheppard & Andrew Udell, 2016. "Do Airbnb Properties Affect House Prices?," Department of Economics Working Papers 2016-03, Department of Economics, Williams College.
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