When local business faded away: the uneven impact of Airbnb on the geography of economic activities

Alberto Hidalgo, Massimo Riccaboni and Francisco J Velazquez

Cambridge Journal of Regions, Economy and Society, 2023, vol. 16, issue 2, 335-348

Abstract: This paper investigates the unequal effect of Airbnb on the spatial organisation of economic activity in Madrid, Spain. Using establishment-level data from Madrid City Council and consumer-facing information from this short-term rental company, we find that Airbnb reshapes the urban space by encouraging tourist-oriented businesses, defined as businesses where tourists spend more than locals, at the expense of businesses primarily oriented to locals. These findings prove that short-term rentals do displace not only the local population but also resident-oriented businesses. Ultimately, our findings remain solid regardless of how we measure short-term rental activity and are not influenced by the growth of e-commerce or gentrification.

Keywords: digital platform; short-term rentals; Airbnb; neighbourhood change; retail sector; tourism (search for similar items in EconPapers)
Date: 2023
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