The Assessment of Substitution Through Event Studies—An Application to Supply-Side Substitution in Berlin’s Rental Market

Economic externalities caused by the platform economy are increasingly attracting regulatory attention. One such externality, which is particularly prominent in public debate, is the impact of the short-term rental platform Airbnb on the housing and rental markets. Globally, commentators and policy makers claim that Airbnb, by reducing the supply of long-term rentals, plays a key role in explaining rent increases, especially in those (parts of) cities that are particularly attractive to tourists. ... Thus, because of the risk for socially undesirable outcomes through rising rents and house prices and since Airbnb has rapidly expanded over the past decade, the immediate reaction of policymakers is to regulate the short-term housing market. As a result, regulators are faced with the difficult task of designing sensible policies that prevent practices likely to contribute to rising rents and house prices without unnecessarily hindering more innocuous use of the short-term rental platform, which can have beneficial effects.