Short-Term Property Rental Platforms and the Housing Market: House Prices and Liquidity

Abstract

This article examines how the short-term peer-to-peer rental market impacts the housing market. Instead of examining premier tourist destinations, our analysis is in a typical state within the United States – Wisconsin (ranked about 20th in terms of population and output). Our results indicate that a doubling of Airbnb properties in a neighborhood increases the price of housing by approximately 11%. However, the impact is heterogeneous. For example, the impact of Airbnb is largest in less dense neighborhoods with high house prices. By contrast, there is no price impact at all in the most urban and dense neighborhoods. We found no consistent evidence that the presence of Airbnb effects liquidity.

Keywords:

• Shared economy
• short-term rental
• Airbnb
• housing
• house price and liquidity

JEL Codes:

• R3
• 30
• 31
• L85