The Effect of Airbnb on Housing Prices: Evidence From the 2017 Solar Eclipse

ABSTRACT

This study exploits the 2017 solar eclipse as a natural experiment to estimate the causal impact of Airbnb activity on housing prices. The eclipse created a temporary demand shock that induced a persistent increase in Airbnb supply. Using an IV/2SLS framework, we find that a 1% increase in Airbnb listings raises housing prices by 0.037%–0.043%, a magnitude consistent with prior studies. We find no evidence of a displacement effect, suggesting that the price response is driven by the capitalization of rental income from utilizing excess housing capacity. Our findings suggest that partial bans on investor listings may have limited efficacy in improving affordability in areas where the capitalization effect is strong.