Study: Airbnb boosts economies in white neighborhoods more

Airbnb frequently touts its economic impact in “diverse” neighborhoods, saying guests spend money locally and boost businesses in areas where tourism is not already prevalent.

But a new Purdue University study found that white neighborhoods — not their black or Latino counterparts — are the ones most likely to benefit from an influx of Airbnb guests.

The study found that users of the home-sharing platform generally eat in the neighborhood restaurants near where they are staying. However the spillover effect does not hold true when 50 percent or more of a neighborhood’s residents are black or Hispanic.

“Airbnb has made repeated claims that it helps the local economy in black neighborhoods, especially in New York City,” said 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.”

Rahman and his team focused their initial research on the impact of Airbnb on restaurant employment growth in New York City, the most visited, and the most active Airbnb city, in the United States.

They analyzed neighborhood data from the Bureau of Labor Statistics, the Census and Airbnb as well as 3.5 million Yelp reviews of more than 34,000 New York City restaurants between 2005 and 2015 to measure the economic impact home sharing has on local restaurant employment. (The researchers removed neighborhoods with significant tourism activity prior to Airbnb’s 2008 launch and controlled for restaurant popularity and neighborhood characteristics.)

The researchers found that neighborhoods experiencing rapid Airbnb growth typically saw a 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.

There could be a benign reason for the disparity, Rahman 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. “Using a subjective and voluntary input like Yelp reviews to draw conclusions in what purports to be a rigorous analysis is wrong.”