Airbnb prices lower among minority hosts in San Francisco

(JR) – Airbnb hosts who are Asian or Hispanic charge 8-10 percent less than white hosts on similar rental properties in San Francisco, new research finds.

The study, published in 2017 in the Journal of Housing Economics, looks at the pricing of San Francisco rentals available through Airbnb, a platform that allows individuals to rent rooms directly to others — one of many new peer-to-peer services that together make up the new “sharing economy.”

While previous research has documented the existence of discriminatory practices against Airbnb guests of color and more broadly, against minorities in the housing market, this study adds to a burgeoning body of literature on potential discrimination against Airbnb hosts by renters.

The researchers looked at data from multiple sources, including Inside Airbnb, which collects information about Airbnb listings for public use, Airbnb host profiles, the U.S. Census, the real estate website Trulia and AirDNA, which calculates analytics for the service. After removing listings from the dataset in which hosts did not have verified identities, profile pictures and at least five reviews, 2,161 hosts remained. The researchers then created a smaller subset from this pool, randomly selecting 715 listings across neighborhoods in San Francisco. Then, they created models to explain variation on rental pricing. They found:

  • Controlling for rental characteristics such as number of bedrooms and bathrooms and cancellation policies, Hispanic and Asian hosts price their listings 15 and 11 percent lower than white hosts, respectively.
  • Adding in a few other controls, including neighborhood property values, area demographics and occupancy rates, this disparity was reduced slightly but still existent. After controlling for these, the data indicates Asian and Hispanic hosts charge 8 to 10 percent less than white hosts on equivalent properties.
  • The authors suggest a few explanations for this observation. They indicate that minority hosts might lower their prices in order to attract guests. “These results,” they add, “may also signal a response to an anticipation of racial discrimination in the online marketplace.”
  • Another explanation the authors offer is that minority hosts lower prices to attract more guests for the purposes of maintaining occupancy or having more renters to choose from — in other words, this strategy might allow them to be more selective.
  • The authors also consider that white hosts might price their listings higher to price out certain types of guests.
  • Over a year, these differences in listing prices can add up. The authors estimate that Asian and Hispanic hosts would collect an average of $4,100 a year less than white hosts.
  • Host gender and sexual orientation did not have a significant effect on rental price.

Citation: Kakar, Venoo; Voelz, Joel; Wu, Julia; Franco, Julisa. “The Visible Host: Does Race Guide Airbnb Rental Rates in San Francisco?” Journal of Housing Economics, 2017. DOI: 10.1016/j.jhe.2017.08.001.

Originally published by Journalist’s Resource  By