Airbnb and Rents: Evidence from Berlin

49 Pages Posted: 19 Aug 2020

See all articles by Tomaso Duso

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization; Centre for Economic Policy Research (CEPR)

Claus Michelsen

German Institute for Economic Research (DIW)

Maximilian Schäfer

German Institute for Economic Research (DIW Berlin)

Kevin Ducbao Tran

University of Bristol, School of Economics

Date Written: August 2020

Abstract

Cities worldwide have regulated peer-to-peer short-term rental platforms claiming that those platforms remove apartments from the long-term housing market, causing an in- crease in rents. Establishing and quantifying such a causal link is, however, challenging. We investigate two policy changes in Berlin to first assess how effective they were in regulating Airbnb, the largest online peer-to-peer short-term rental platform. We document that the policy changes reduced the number of entire homes listed on Airbnb substantially, by eight to ten listings per square kilometer. In particular the introduction of limitations on the misuse of regular rental apartments as short-term accommodations, also strongly reduced the average number of days per year that Airbnb listings are available for booking. In a second step, we then use this policy-induced change in Airbnb supply to assess the impact of Airbnb on rents in the city. Our results suggest that each nearby apartment on Airbnb increases average monthly rents by at least seven cents per square meter. This effect is larger for Airbnb listings that are available for rent for a larger part of the year. Further analyses suggest some effect heterogeneity across the city. In particular, areas with lower Airbnb density tend to be affected more by additional Airbnb listings.

Keywords: Rents, housing market, short-term rental regulation, sharing economy, Airbnb

JEL Classification: R21,R31,R52,Z30

Suggested Citation

Duso, Tomaso and Michelsen, Claus and Schäfer, Maximilian and Tran, Kevin Ducbao, Airbnb and Rents: Evidence from Berlin (August 2020). DIW Berlin Discussion Paper No. 1890, Available at SSRN: https://ssrn.com/abstract=3676909 or http://dx.doi.org/10.2139/ssrn.3676909

Tomaso Duso

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization ( email )

Berlin, 10585
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Claus Michelsen

German Institute for Economic Research (DIW) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Maximilian Schäfer

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Kevin Ducbao Tran (Contact Author)

University of Bristol, School of Economics ( email )

8 Woodland Road
Bristol BS8 ITN
United Kingdom

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