Does Airbnb raise local rent in Seoul? Spatial 2SLS model approach

초록

Airbnb has become increasingly important to the tourism industry as the sharing economy has grown. It is closely linked to the rental market as it converts residential housing into short-term rentals. This study examines the effects of Airbnb on rent prices in Seoul, South Korea using a spatial two-stage least squares (spatial 2SLS) model with instrumental variables that account for spatial effects and endogeneity. By using hot spot analysis, we identify spatial regimes of Airbnb and then divide Seoul into six regimes. Findings show that the spatial expansion of Airbnb is positively associated with rental prices and that Airbnb's effect is spatially heterogeneous. Specifically, a one standard deviation increase in Airbnb listings leads to a 0.6 percentage point increase in rent in major residential areas and a 0.06 percentage point increase in central areas in Seoul. In addition, results show that the values of the coefficient are different by Airbnb type; in particular, only the coefficient of the 'entire home' value is statistically significant, while other types are not, after controlling for other factors and spatial effects. Our results suggest that policymakers should control the expansion of Airbnb not only to resolve the shortage of affordable rental housing caused by the transformation of long-term lease properties to Airbnb listings but also to minimize the negative influence on local living environments.

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