HOW REGULATIONS AND CONSUMERS’ PERCEPTIONS MODERATE THE IMPACT OF AIRBNB ON REAL ESTATE PRICES

The sharing economy facilitates private transactions among individuals, and is thought to increase the demand for, and the price of, the resources transacted. This study focuses on Airbnb and real estate prices. It explores whether consumers’ perceptions—specifically, about “spanner hosts” (firms that shift properties from the long-term rental market onto Airbnb, spanning the two markets)—contribute to the increase of real estate prices attributable to the sharing economy. Using longitudinal data of Airbnb hosts in 10 major U.S. cities over seven years, we discover that spanning firms (and not individuals listing only one property) are responsible for the price increase of real estate properties. We also find that this increase can be weakened by changes in consumers’ perceptions and the regulation of the sharing economy—that separate the spanner host category from other categories in the industry (e.g., individuals listing only one property). Finally, we find that the moderating effect of regulations is associated with changes in consumers’ perceptions of the typical sharing economy host when the regulation change is discussed, not with regulation enforcement. The more consumers become aware of spanners on Airbnb, the less those spanners affect the real estate prices, even before the law is enforced.