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What is the Value of Being a Superhost?

Aleksander Berentsen (), Mariana Rojas Breu and Christopher Waller ()

No 2019-19, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We construct a search model where sellers post prices and produce goods of unknown quality. A match reveals the quality of the seller. Buyers rate sellers based on quality. We show that unrated sellers charge a low price to attract buyers and that highly rated sellers post a high price and sell with a higher probability than unrated sellers. We fi nd that welfare is higher with a ratings system. Using data on Airbnb rentals, we show that Superhosts and hosts with high ratings: 1) charge higher prices, 2) have a higher occupancy rate and 3) higher revenue than average hosts.

Keywords: Ratings; Airbnb; Price Posting (search for similar items in EconPapers)
JEL-codes: D21 D40 L11 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2019-07-01
New Economics Papers: this item is included in nep-pay
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DOI: 10.20955/wp.2019.019

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Handle: RePEc:fip:fedlwp:2019-019