Affiliation bias in the online market for rental accommodation

Barbara A. Bliss, Joseph Engelberg and Mitch Warachka

Real Estate Economics, 2021, vol. 49, issue 1, 224-266

Abstract: We find evidence of taste‐based discrimination against rival affiliations in the online market for rental accommodation. Airbnb hosts in college towns increase their listing prices more than hotels on home football games against rival teams. By setting listing prices too high as a result of their affiliation bias against rival fans, hosts experience a 30% reduction in rental income. The overestimation of demand, the cost (inconvenience) of temporary relocation, and the likelihood of incurring damage cannot explain the inverse relation between listing price increases, and rental incomes that is limited to games against rival teams. Instead, greater financial constraints are associated with smaller listing price increases, and higher rental incomes on rival games, suggesting that taste‐based discrimination is a luxury.

Date: 2021
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https://doi.org/10.1111/1540-6229.12339

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