How to better incorporate geographic variation in Airbnb price modeling?

Yifei Jiang, Honglei Zhang, Xianting Cao, Ge Wei and Yang Yang

Tourism Economics, 2023, vol. 29, issue 5, 1181-1203

Abstract: Since entering the Chinese market in 2015, Airbnb has become a major player in the Chinese home-sharing arena. This article uses data from 8012 active Airbnb listings in Shanghai and presents three models (linear regression, geographically weighted regression, and random forest) to study the determinants of Airbnb listing prices and incorporate geographic variation in price modeling. Results show that property quality plays a key role in shaping listing prices. Due to Airbnb’s distinctions from traditional lodging in both features and business models, Airbnb pricing determinants differ accordingly. For example, location conditions were found to have a limited impact in regions with established transportation networks. Among the three models, random forest performed best in terms of prediction accuracy. Lastly, practical implications are discussed.

Keywords: airbnb pricing; pricing factors; geographically weighted regression; random forest; Shanghai (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:29:y:2023:i:5:p:1181-1203

DOI: 10.1177/13548166221097585

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