Preferences for Local Public Goods and the Gig Economy
The gig economy has influenced the operations of key markets such as transportation and housing. Although there is a growing body of literature on this topic, the impact of individuals’ preferences for government-provided goods on these new markets has not been extensively studied. This paper investigates the extent to which different responses to increases in property taxes shape the incentives to supply in the gig economy through short-term rental services (Airbnb). Empirical examination is done through a stacked difference-in-difference and stacked regression discontinuity model that compares the probability of exiting the Airbnb market between school districts in Texas with narrow approvals/rejections. Results from this model suggest that increases in property tax burden (captured via the elections) lead to an increase in the probability of exiting the Airbnb market in the short-term. These findings shed some light on the role that local policy plays in the development of Airbnb in the United States, and link two relevant literatures in policy evaluation.
