Macro/Trade Seminar | Comparing Housing Rents in Cities Around the World: Can an Airbnb Big-Mac Index Help? by Robert Hill
School of Economics
Invites you to a
Macroeconomics and Trade seminar presented by
Comparing Housing Rents in Cities Around the World:
Can an Airbnb Big-Mac Index Help?
Norbert Pfeifer (Karl-Franzens-Universität Graz)
Miriam Steurer (Karl-Franzens-Universität Graz)
Wednesday 11 October 2023
2:00pm – 3.30pm
Level 6 Seminar Room (650)
A02 Social Sciences Building
The University of Sydney NSW 2006
Housing rents are one of the most important and difficult elements of spatial cost of living comparisons. Difficulties arise from the lack of sufficiently detailed and harmonized data, especially at an international level. The emergence of Airbnb has created a valuable new source of internationally harmonized, micro-level rental data that can help circumvent these difficulties. In this paper, we combine hedonic regression and multilateral price index methods to construct an Airbnb Big-Mac type rent index for 60 cities across Europe, the Americas, Asia, Africa, and Australia. We then use this index to investigate a number of issues ranging from how Airbnb rents differ across cities, the relationship between short and long-term rents, how Airbnb rent indices can be used to improve long-term rent indices, to demonstrating the pivotal role played by rents in determining the price level in a city. We also show that housing affordability, as measured by the rent-income ratio, is broadly stable across our sample of cities, which supports the common assumption in the urban economics literature of a unit elasticity of substitution between consumption of goods and housing.
For further information contact: Macroeconomics and Trade seminar series coordinator Dr James Graham (email@example.com)