Estimating the Impact of Airbnb on the Local Economy: Evidence from the Restaurant Industry

We study the effect of Airbnb on restaurant revenue in the state of Texas using a difference in difference strategy that exploits the geographical and temporal variation of Airbnb’s entry in Texas to show that a 1% increase in Airbnb listings is associated with a 0.01% increase in restaurant revenue. Moreover, this increase is revenue is driven, at least in part, by an increase in restaurant demand. Finally, we show that the positive effect of Airbnb is more pronounced for independent restaurants and less commercial—and therefore with less economic activity—zipcodes. Overall, our results provide evidence that home-sharing platforms like Airbnb can increase economic activity for businesses and in neighborhoods that are more likely to need it most. Joint with Suman Basuroy and Yongseok Kim.

Keywords: Sharing Economy, Peer-To-Peer Markets, Airbnb, Restaurant Revenue, Local Economy

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Davide Proserpio is an Assistant Professor of Marketing at University of Southern California Marshall School of Business. In his research, Professor Proserpio seeks to measure and quantify the impact of digital data and platforms on industries and markets, and most of his work focuses on the empirical analysis of a variety of companies including Airbnb,TripAdvisor, and Expedia. Professor Proserpio holds a B.S. from Politecnico di Milano (Milan, Italy), a M.S. from Carlos III University (Madrid, Spain), and a Ph.D. in Computer Science from Boston University.