| Abstract: | We examine the determinants of Airbnb prices in 10 major EU cities, focusing on the role of location. The results confirm that attributes related to size, quality, and location are all significant drivers of Airbnb rates. Novel indices based on TripAdvisor data are used to measure the attractiveness of neighbourhoods, and the results show a more robust impact on price than standard location variables based on selected points of interest. The analysis confirms that Airbnb prices are spatially dependent, requiring the implementation of spatial regression models. Following recent studies on spatial econometrics, we examine various spatial models, including specifications with multiple sources of spatial dependence. The results show significant differences between the coefficients estimated with OLS and the various spatial models, especially in the case of location-specific variables. As well as having managerial and policy implications, our study contributes to the hedonic price literature by providing a methodological guide on spatial regression models. |
