Is Airbnb increasing housing rental prices? Empirical evidence from the city of Madrid, Spain

Abstract

The continuous growth of the collaborative economy in the last decades has attracted the attention of researchers, social agents and policymakers on how this phenomenon affects the rental market. Although there have been various researchers who have studied this problem, there is still a lack of sufficient evidence to take political decisions with the aim of properly regulate this market. For this reason, the main objective of this work is to try to empirically examine how Airbnb affects the prices in the rental market. To do this, a descriptive analysis of rental prices has been carried out over time for the different provinces of Spain, in which the way in which prices have oscillated during the last decade will be observed. Subsequently, by using data on the housing market and Airbnb in Madrid, a hedonic price model has been estimated.