From Sharing to Capitalizing: Evaluating the Rise of Airbnb in Housing Prices

ABSTRACT This paper investigates the causal impact of short‐term rentals (STRs) on housing prices across French municipalities in 2018−2019. Using Airbnb data and a novel demand‐shock instrument, we isolate exogenous variation in STR supply. A 1% increase in STR density raises local housing prices by an average of 11%, with stronger effects in densely populated, supply‐constrained cities and in non‐touristic rural areas. Results also show substantial heterogeneity between professional and non‐professional hosts, the latter driving most of the capitalization effect. By combining platform and administrative data, the paper provides new evidence on how tourism‐driven housing demand shapes real‐estate markets.