The role of distance in the peer-to-peer market for tourist accommodation

Abstract

This article provides evidence on the concentration of peer-to-peer tourist accommodations in the center of cities and the role of distance. On that basis, an explanatory model is proposed to understand the locating decisions of the different agents involved. The model is empirically implemented through a two-stage least squares regression, which allows estimating the elasticity of demand with respect to price and distance. Results for the Spanish cities of Barcelona and Madrid confirm similar price elasticity of demand in both (2.2 and 2.4, respectively) but greater sensibility of demand with respect to distance to the center in the former.