Two Clemson University Ph.D. students, Sebastian Anastasia and Vitor Melo, have recently published their research in the European Journal of Political Economy. Their article, titled “Short-term rental bans and the hotel industry: Evidence from New York City,” investigates the economic and political dynamics behind New York City’s decision to restrict short-term rentals such as those offered through Airbnb.
Anastasia, Melo and their coauthors find that the hotel industry played a central role in advocating for the ban, leveraging its superior ability to coordinate and outspend home-sharing platforms in political contributions, particularly prior to the policy’s implementation. Empirically, the paper documents that in the 18 months following the ban, hotel revenues increased by approximately $2.1 to $2.9 billion, primarily due to a $14 to $19 rise in average daily rates, rather than increases in occupancy. These results suggest that the regulatory action significantly benefited incumbent firms while raising important questions about the role of interest groups in shaping market rules.
