Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona

In this paper, we assess the impact of the arrival and expansion of Airbnb on housing rents and prices in the city of Barcelona. Examining highly detailed data on rents and both transaction and posted prices, we use several econometric approaches that exploit the exact timing and geography of Airbnb activity in the city. These include i) panel fixed-effects models with neighborhood-specific time trends, ii) an instrumental variable shift-share approach in which tourist amenities predict where Airbnb listings will locate and Google searches predict when listings appear, and iii) event-study designs. For the average neighborhood in terms of Airbnb activity, our preferred results imply that rents have increased by 1.9%, while transaction (posted) prices have increased by 5.3% (3.7%). The estimated impact in neighborhoods with high Airbnb activity is substantial. For neighborhoods in the top decile of Airbnb activity distribution, rents are estimated to have increased by 7%, while increases in transaction (posted) prices are estimated at 19% (14%).