Consumer valuation of Airbnb listings: a hedonic pricing approach

Yong Chen (Ecole hôtelière de Lausanne, HES-SO / University of Applied Sciences Western Switzerland, Lausanne, Switzerland)
Karen Xie (Daniels College of Business, University of Denver, Denver, Colorado, USA)

International Journal of Contemporary Hospitality Management

ISSN: 0959-6119

Publication date: 11 September 2017

Abstract

Purpose

This paper aims to identify a wide array of utility-based attributes of Airbnb listings and measures the effects of these attributes on consumers’ valuation of Airbnb listings.

Design/methodology/approach

A hedonic price model was developed to test the effects of a group of utility-based attributes on the price of Airbnb listings, including the characteristics of Airbnb listings, attributes of hosts, reputation of listings and market competition. The authors examined attributes as they relate to the price of Airbnb listings and, therefore, estimated consumers’ willingness to pay for the specific attributes. The model was tested by using a dataset of 5,779 Airbnb listings managed by 4,602 hosts in 41 census tracts of Austin, Texas in the USA over a period from Airbnb’s launch in Texas up until November 2015.

Findings

The authors found that the functional characteristics of Airbnb listings were significantly associated to the price of the listings, and that three of five behavioral attributes of hosts were statistically significant. However, the effect of reputation of listings on the price of Airbnb listings was weak.

Originality/value

This study inspires what they call a factor-endowment valuation of Airbnb listings. It shows that the intrinsic attributes that an Airbnb listing endows are the primary source of consumer utilities, and thus consumer valuation of the listing is grounded on its functionality as an accommodation. This conclusion can shed light on the examination of competition between Airbnb and hotel accommodations that are built on the same or similar intrinsic attributes.

Keywords

Citation

Yong Chen and Karen Xie (2017) "Consumer valuation of Airbnb listings: a hedonic pricing approach", International Journal of Contemporary Hospitality Management, Vol. 29 No. 9, pp. 2405-2424

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DOI

: https://doi.org/10.1108/IJCHM-10-2016-0606

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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