The Effect of Short-Term Rentals on Local Consumption Amenities: Evidence from Madrid

Alberto Hidalgo (), Massimo Riccaboni () and Francisco J. Velázquez ()
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Alberto Hidalgo: IMT School for advanced studies
Massimo Riccaboni: IMT School for advanced studies
Francisco J. Velázquez: Universidad Complutense de Madrid

No 01/2022, Working Papers from IMT School for Advanced Studies Lucca

Abstract: This paper investigates the impact of the arrival of Airbnb on the local consumption amenities in Madrid. We exploit the exogenous variation created by the timing and the unequal distribution of Airbnb listings across the urban geography to identify its effects on food and beverage establishments. Using an instrumental variable strategy, we find positive local effects on both the number of restaurants and their employees: an increase in ten Airbnb rooms in a given census tract translates into one more restaurant, and the same increase in a given neighborhood generates nine new tourist-related employees. The results are robust to sample composition, spatial spillovers and alternative measures of local consumption amenities. This paper contributes to the literature on the economic impacts of the platform economy on urban areas by providing evidence of positive economic externalities from short-term rentals.

Keywords: Consumption amenities; Short-term rentals; Tourism (search for similar items in EconPapers)
JEL-codes: R10 R23 Z32 (search for similar items in EconPapers)
Pages: 46
Date: 2022-01, Revised 2022-01
New Economics Papers: this item is included in nep-pay and nep-ure
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Citations: View citations in EconPapers (4)

Published in EIC working paper series

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http://eprints.imtlucca.it/4083/ First version, 2022

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Persistent link: https://EconPapers.repec.org/RePEc:ial:wpaper:1/2022

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