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Affiliation bias in the online market for rental accommodation

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  • Barbara A. Bliss
  • Joseph Engelberg
  • Mitch Warachka

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.

Suggested Citation

  • Barbara A. Bliss & Joseph Engelberg & Mitch Warachka, 2021. "Affiliation bias in the online market for rental accommodation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(1), pages 224-266, March.
    • Handle: RePEc:bla:reesec:v:49:y:2021:i:1:p:224-266
    DOI: 10.1111/1540-6229.12339
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