Is there a future for sharing? A comparison of traditional and new institutions

Anders Fremstad ()

Journal of Institutional Economics, 2018, vol. 14, issue 4, 595-616

Abstract: The sharing economy has raised hopes that online platforms will usher in a new era of sharing, even though economic theory suggests that income growth may reduce sharing in the long run. This paper presents evidence that that high-income people are less likely than low-income people to use traditional institutions for sharing goods, including carpools, multi-person households, and garage sales. While it first appears that high-income people are equally likely to use new institutions, such as Craigslist, Airbnb, and Zipcar, this partly reflects the fact that many low-income households in the US still lack an internet connection. Conditional on having internet access, this paper finds that online sharing platforms are also disproportionately used by the poor. The future of sharing likely depends on countervailing forces. Economic growth may continue to dampen incentives to share goods, but this effect could be offset by the proliferation of institutions, norms, and preferences that facilitate sharing.

Date: 2018
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