Spatial Airbnb Rent Indices for Cities Around the World: Insights for Long-Term Rents and Housing Affordability

Housing rents are one of the most important and difficult elements of spatial cost of living comparisons. The main difficulty arises from the lack of sufficiently detailed and harmonized data, especially at the international level. The emergence of Airbnb has created a valuable new source of internationally harmonized, micro-level rental data that circumvents this problem. In this paper, we combine hedonic regression and multilateral price index methods to construct an Airbnb spatial rent index for 60 cities across Europe, the Americas, Asia, Africa, and Australia. We then use this index to investigate three main issues: (i) How Airbnb rents differ across cities; (ii) How Airbnb and long-term rents are related; (iii) How housing affordability varies across cities. In particular, our Airbnb rent indices shed light on the extent to which two alternative long-term rent indices are quality-adjusted and highlight two different concepts of housing affordability: rent divided by income versus quality-adjusted rent divided by income. We find that housing affordability is worse in poorer cities according to the latter but not according to the former.