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Is peer-to-peer demand cointegrated at the listing level?

Author

Listed:
  • Jorge V. Pérez-Rodríguez

    (University of Las Palmas de Gran Canaria)

  • Heiko Rachinger

    (University of the Balearic Islands)

  • Rafael Suárez-Vega

    (University of Las Palmas de Gran Canaria)

Abstract

In this paper, we analyse the long-run equilibrium demand of the peer-to-peer sharing economy. Our panel data demand model relates occupancy rates to relative prices of Airbnb and HomeAway listings, prices of competitors (hotels and apartments) and a proxy for income of tourists visiting the Canary Islands (Spain). We use a fractional heterogeneous panel data model which allows for a more general persistence and cointegration relationship and incorporates individual and interactive fixed effects. We find some evidence for (fractional) cointegration in P2P at the listing level. Regarding elasticities, classic cointegration methods give larger estimates for individual slopes and mean group coefficients than the fractional integrated heterogeneous model. Finally, own-price elasticities are inelastic, and the cross-price elasticity indicates that P2P listings and hotels are substitute goods. Income elasticity is lower than 1 and is not statistically significant, indicating that the demand for tourism in the Canary Islands is not sensitive to the economic conditions in the origin countries.

Suggested Citation

  • Jorge V. Pérez-Rodríguez & Heiko Rachinger & Rafael Suárez-Vega, 2024. "Is peer-to-peer demand cointegrated at the listing level?," Empirical Economics, Springer, vol. 66(5), pages 2249-2275, May.
    • Handle: RePEc:spr:empeco:v:66:y:2024:i:5:d:10.1007_s00181-023-02522-7
    DOI: 10.1007/s00181-023-02522-7
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