Estimating the Impact of Airbnb on the Hotel Industry

The Rise of the Sharing Economy

Team #1 Deenadhayalan.P

abstract• In this study Airbnb, a sharing economy pioneer offering short-term

accommodation. • Combining data from Airbnb and the Texas hotel industry, estimate

the impact of Airbnb’s entry into the Texas market on hotel room revenue, and study the market response of hotels

• To identify Airbnb’s causal impact on hotel room revenue, we use a difference-in-differences empirical strategy that exploits the significant spatiotemporal variation in the patterns of Airbnb adoption across city-level markets

• this work provides empirical evidence that the sharing economy is making inroads by successfully competing with, and acquiring market share from, incumbent firms.

Introduction“a social website that connects people

who have space to spare with those who are looking for a place to stay”

Introduction