Does Home Sharing Impact Crime Rate? An Empirical Investigation

Abstract

The rise of the sharing economy has disrupted traditional industries and has had many unforeseen societal impacts. This has sparked policy debates on whether and how the sharing economy should be regulated to promote the healthy growth of such markets. In this research, we examine the impact of platform self-regulation in the context of the home-sharing market. Using policy changes that reduce the number of Airbnb listings, we deploy a difference in difference approach to empirically test the impact of platform self-regulation on the crime rate. Our results suggest that a reduction in Airbnb listings resulting from the platform self-regulation leads to a reduction in crime. We further study the impact of these policy changes on different types of crime and find that these self-regulations lead to a reduction in incidents of crime such as assault, robbery, and burglary, but an increase in theft incidents. In addition, we use geographically weighted regression to investigate the heterogeneous effects of Airbnb occupancy on different types of neighborhoods, and show that income, housing price, and population moderate the impact of such regulations. This research contributes to our understanding of the societal impacts of the sharing economy and the impact of platform self-regulation. Our findings also provide empirical evidence to inform policymaking.