Study questions claim by Airbnb
Findings suggest black, Latino neighborhoods are less likely to benefit from the firm.
Airbnb has touted its ability to stimulate local economies as one of the platform’s larger benefits for cities, and a recent study suggests that might be true — but only for the cities’ primarily white neighborhoods.
The study, conducted at Purdue University, found that white neighborhoods — not their black or Latino counterparts — are most likely to benefit from an influx of Airbnb guests, though Los Angeles was an exception by one measure.
The study found that users of the short-term home-rental platform generally eat at neighborhood restaurants near where they are staying. However, the spillover effect does not hold true when 50% or more of a neighborhood’s residents are black or Latino.
The Purdue team initially focused on the effects of Airbnb on restaurant employment growth in New York, the most visited and most active Airbnb city in the United States.
The researchers found that neighborhoods experiencing rapid Airbnb growth typically saw growth in restaurant employment. Such areas also experienced a surge in their share of Yelp reviews by visitors to New York, a measure that researchers said reconfirmed their employment findings.
But restaurants in predominantly black or Latino neighborhoods with high rates of Airbnb bookings did not see a corresponding increase in employment and Yelp reviews.
After analyzing its New York findings, the team expanded its study to five more cities: Los Angeles; Austin, Texas; Chicago; Portland, Ore.; and San Francisco.
Most of the cities exhibited similar trends to New York, but Los Angeles had one exception, showing positive restaurant employment rates in Latino neighborhoods.
With Los Angeles’ population nearly half Latino, the study suggested that the population “may change perceptions of potential interactions of people visiting the city.”
Of the 37 mainly Latino ZIP Codes gathered from the additional cities in the study, 25 were in Los Angeles.
The team analyzed neighborhood data from the Bureau of Labor Statistics, the U.S. census and Airbnb, as well as 3.5 million Yelp reviews of more than 34,000 New York restaurants between 2005 and 2015 to measure the economic impact that home sharing has had on local restaurant employment.
The researchers said they removed neighborhoods with significant tourism activity prior to Airbnb’s 2008 launch and controlled for restaurant popularity and neighborhood characteristics.
“Airbnb has made repeated claims that it helps the local economy in black neighborhoods, especially in New York City,” said lead study researcher Mohammad Rahman, a professor at Purdue University’s Krannert School of Management who specializes in the digital economy and big data. “We do not find any evidence of that economic spillover effect in restaurant employment.”
Researchers said Airbnb visitors may be drawn to more affordable accommodations in black and Latino neighborhoods — but not enough to eat there.
“Visitors may not feel comfortable wandering around and checking out restaurants in these minority areas,” Rahman said. “It’s the uncomfortable reality in our society. They may be a lot more careful and just sleep at the Airbnb, coming and going in the comfort of an Uber or a Lyft.”
There could also be a more benign reason for the disparity, he said. “The kinds of restaurants these visitors are looking for may not be present in these neighborhoods.”
Nick Papas, an Airbnb spokesman, disputed the results of the study, a working paper that he called “deeply flawed.”
“Airbnb undoubtedly boosts local businesses,” Papas said in a statement. “Using a subjective and voluntary input like Yelp reviews to draw conclusions in what purports to be a rigorous analysis is wrong.”
According to the company, Airbnb guests spend 32% of their money in the neighborhoods where they stay, and 95% of New York hosts recommend local small businesses to their guests.
The company said it’s working to highlight local businesses, partnering last month with the Queens Chamber of Commerce to sponsor a tourism mixer where Airbnb hosts mingled with representatives from neighboring restaurants and shops. In New York, Papas said, Airbnb guests are growing at a faster rate in predominantly black neighborhoods than they are citywide. “We are now creating significant economic opportunities in communities of color that have historically been ignored by hotels,” Papas said.
Rahman said he relied predominantly on government employment data — not Yelp reviews — to address concerns about the voluntary nature of online restaurant reviews.
Rahman said he and his colleagues plan to dig deeper into the data and analyze reviews on Yelp and Airbnb for “racial code words,” as well as the races of Airbnb guests, which may offer more insight into the disparity.
He said it’s imperative to understand the full effects of the sharing economy as regulators struggle with ways to frame legislative discussions surrounding its impact.
“We hear a lot of statements about how the digital transformation is blind to the inequalities in society, but we do not live in a vacuum,” Rahman said.
“We cannot regulate and dictate how visitors are going to behave,” he said, “but if we can identify how race is playing a role, there are certain things that can be rectifiable when guests come into these minority neighborhoods.”
Jan writes for the Washington Post. Times staff writer Ethan Millman contributed to this report.