CLEARING THE AIR: EVALUATING THE IMPACT OF SHORT-TERM RENTAL REGULATIONS ON BARCELONA’S AIRBNB MARKET

Abstract

This paper aims to measure the causal effects of Barcelona’s Plan Especial Urbanístico de Alojamientos Turísticos (PEUAT) short-term rental regulations on the equilibrium price, supply, and demand of Airbnb listings in the city. Using a difference-in-differences approach, I analyze a dataset of 134,960 Airbnb listings in Barcelona and Sevilla over the period 2015-2023, measuring the average monthly changes in price, supply of listings, and number of guest reviews before and after the enactment of the regulations in March 2017. I find that on average, the price of Airbnb listings that were subject to PEUAT regulations decreased by €21.03, the number of reviews decreased by 8.08, and the overall supply of listings decreased by 5,582, suggesting that while these regulations were ineffective in restricting the supply of Airbnb listings, they unexpectedly led to a decrease in Airbnb demand and accommodation prices. My findings and presented policy recommendations — to create more targeted short-term rental initiatives, introduce a categorized permit system, and improve the quality of data collection — aim to contribute to an ongoing scholarly discussion regarding the regulation of short-term rentals worldwide.