Analyzing the Impact of Electricity Prices on Airbnb - A Linear Regression Approach
Master thesis
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https://hdl.handle.net/11250/3158938Utgivelsesdato
2024Metadata
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- Master Thesis [4508]
Sammendrag
The digital age has transformed the economy, giving rise to the sharing economy and platforms like Airbnb, which have revolutionized the hospitality industry by allowing individuals to rent out their homes. As the cost of living continues to rise, it becomes essential to understand how fluctuations in utility prices, such as electricity, influence rental markets. This study specifically examines whether electricity prices affect Airbnb listing prices. The basis of this study is Copenhagen, Oslo, and Stockholm, and the data spans from the fourth quarter of 2021 to the fourth quarter of 2023. This period includes significant global events, such as the Russian-Ukrainian war, which have influenced energy markets significantly. Using panel data consisting of data from Inside Airbnb and reputable public sources for electricity prices, we apply simple linear regression through Python to analyze the relationship between electricity prices and Airbnb prices. The results show that there is a slightly negative, nearly non-existent, relationship between them. These findings suggest that as electricity prices increase, Airbnb prices are either slightly reduced or stay the same. This could indicate that Airbnb hosts might not be able to offset their increased electricity costs to guests and consequently must suffer the results of rising energy costs, for example when global events affect the economy. This research provides valuable insights for policymakers, economists, and stakeholders in the short-term rental market, highlighting the need for strategies to handle the effects of energy price volatility. Future research should focus on including a broader range of countries, separating the effects of Covid-19 and the Russian-Ukrainian war, extending the study period, considering lagged electricity prices, conducting qualitative interviews with Airbnb hosts, and ensuring consistent data collection methods.