Sharing Places: Local Socio-Economic Organization and Inequality in Contemporary Short-Term Rental Markets

Abstract

Research on markets distinguishes niche markets, characterized by local community engagement and specialization, from mass markets, characterized by arms-length exchange and large-scale production. Yet, this research often overlooks how inequality differentially underpins these forms of exchange. Building on this work, I explore how local socio-economic disparities may structure different segments of short-term rental markets in the platform (i.e., “sharing”) economy. Drawing on cross-sectional analyses of over 300,000 Airbnb listings clustered in 277 U.S. metropolitan areas, I find that microentrepreneurial short-term rental markets—involving small-scale exchanges that typically demand more personal investment and social interaction—are embedded in civically active communities struggling with economic and housing precarity. Large-scale short-term rental markets—typically involving more socially distant exchanges in which operators rent multiple properties—are prevalent in expensive housing markets, where there are real estate investment opportunities to capitalize on housing vacancies. This study thus builds on understandings of market formation and segmentation, incorporating the role of local inequality, while also illuminating the tensions within platform economy markets more broadly.