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Effect of Sharing Economy on Tourism Industry Employment

March 1, 2016
By Bin Fang, Qiang Ye, Rob Law

This research paper examines the effects of the entry of peer-to-peer economy services, such as Airbnb, on employment in the local tourism industry.

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This research paper, authored by Harbin, China Institute of Technology researchers Bin Fang and Qiang Ye and Hong Kong Polytechnic University professor of hotel and tourism technology management Rob Law, examines the effects of the entry of peer-to-peer economy services, such as Airbnb, on employment in the local tourism industry.

Fang and the team of researchers used government data and data from peer-to-peer short-term rental service Airbnb to measure the peer-to-peer economy’s effect on tourism industry employment, they write.

“To explore this issue, we first gathered data from the Airbnb website, particularly on listing data for Idaho, USA,” Fang writes. “The tourism industry of this state outranks its other industries in terms of revenue and continues to experience a remarkable increase. Hence, investigating the effect of the entry of sharing economy on the local tourism industry of Idaho is vital. A total of 657 distinct listings for Idaho were collected and aggregated by county. We then retrieved the county-level annual tourism employment data for the period of 2009–2013 from the Idaho Department of Labor and regard the information as the dependent variable. Given that population size may affect employment in the tourism industry, we consider county population as a control variable. Based on the collected information, we constructed county–year panel data covering the period of 2009-2013 to explore the effect of the entry of sharing economy on employment in the tourism industry.”

Fang and the team write that Airbnb has a positive macroscopic effect on unemployment rates.

“The results suggest that the entry of the sharing economy benefits the entire tourism industry by generating new job positions, as more tourists would come due to the lower accommodation cost,” Fang and the researchers write. “However, since low-end hotels are being shocked and replaced by Airbnb, the marginal effect decreases as the size of sharing economy increases. … The current study also offers several direct implications for government policies. Our results show that sharing economy, at certain developmental stages, plays an important role in solving the unemployment problem.”