Sharing Economy as Disaster Remedy: The Case of Airbnb

• In Event: Informing Disaster Risk Management: Analyses of Forecasting, Short-term Displacement, Public Disaster Assistance, and Long-term Relocation

Abstract

Environmental disasters increasingly displace people worldwide without much notice. The massive growth in the sharing economy has unlocked a new source of short-term housing supply for displaced people. In this paper, I quantify the welfare impacts of home sharing on short-term displacement in the context of wildfire evacuations for one of the world’s largest home-sharing markets – the Los Angeles area. I develop and estimate a structural model of the home-sharing market under informational asymmetry on customer type (disaster refugee versus regular traveler), which highlights two welfare channels: the increased choice set of housing, and the altruistic sharing by hosts. I find that the displacement loss amounts to at least 31% of the property damages caused by wildfire. Airbnb can reduce this welfare loss by 52%, with a quarter of mitigation contributed by supplier generosity. I show that altruistic sharing is mostly conducted by hosts who are more well-off as indicated by their demographics and home characteristics. I also estimate the welfare spillovers as a result of the free riding of regular travelers. I recommend that a platform targeting of displaced people can improve the efficiency and equity of mitigation gains.

Author

• Wei GUO, University of California, Riverside
  Presenting Author