Is airbnb still for sharing economy or speculation? evidence from dynamic impacts on house prices

Abstract

Peer-to-Peer rental platform known as "the sharing economy" that allocates the extra resources of individuals to those who need them is hot thing in academia and industry. Airbnb, which is represented by the sharing economy in accommodation market, has been criticized that it is disrupting the housing market by raising prices. The fact that anyone with durable goods can do their own business can cause overheat the market of durable goods. Cities around the world recognized the issue and have begun to introduce regulations on short-term rental to prevent the overheated housing market from Airbnb. This research quantifies the impacts of Airbnb’s entry on house prices and identifies the effect of short-term rental policies to regulate Airbnb. Using panel data sets of Airbnb listings and house price index in a given zipcode in U.S. by month, we find that the entry of Airbnb leads to increase in house prices. To identify the underlying mechanisms, we decompose into the types of Airbnb listing and the scale of housing unit. The results indicate Airbnb enhances the incentive to invest in residential properties with small scale (one or two bedrooms bouses) thereby increasing the house prices. Finally, using the policies against short-term rental in major 10 cities, we estimate short-term rental polices attenuate the effect of Airbnb on house prices.