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The Tragedy of Your Upstairs Neighbors: Is the Airbnb Negative\n Externality Internalized?

2015/12/16 by John J. Horton, Horton, John J.
Business, Management and Accounting · Economics, Econometrics and Finance · Engineering · #FOS: Economics and business #General Finance (q-fin.GN) #Housing Market and Economics #Housing, Finance, and Neoliberalism #Sharing Economy and Platforms #Transportation and Mobility Innovations

paper · pdf · doi:10.48550/arxiv.1611.05688

openalex publication_date 2015/12/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28

Abstract

A commonly expressed concern about the rise of the peer-to-peer rental market\nAirbnb is that hosts---those renting out their properties---impose costs on\ntheir unwitting neighbors. I consider the question of whether apartment\nbuilding owners will, in a competitive rental market, set a building-specific\nAirbnb hosting policy that is socially efficient. I find that if tenants can\nsort across apartments based on the owners policy then the equilibrium fraction\nof buildings allowing Airbnb listing would be socially efficient.\n

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