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If you’re an Airbnb host, you might want to get yourself a make-over before making over your apartment.
According to new research published in the Journal of Economic Psychology, more attractive Airbnb hosts are able to charge more for their rental properties than less attractive hosts.
“Some studies have shown that consumer decisions in online peer-to-peer markets are influenced by the attractiveness and trustworthiness of sellers,” state the authors of the research, led by Bastian Jaeger of the University of Tilburg in the Netherlands. “Our analysis […] revealed that more attractive-looking hosts charge 2.78% higher prices for similar apartments.”
To arrive at this conclusion, the researchers randomly selected 1,020 New York City Airbnb apartment listings. They downloaded images of the hosts and recruited people online to rate their perceived attractiveness and trustworthiness. They also recorded the host’s gender, the number of bedrooms in the host’s apartment, the median local rent, the reviews of the host’s apartment, and the asking price.
What did they find? First, they reported that the nightly prices of New York City apartments in their sample ranged from $25 to $1500, with a median price of $128.50. Next, controlling for differences in the rental listings that are known to influence rental prices (for example, desirability of the neighborhood, size of the apartment, etc.), they found that the attractiveness of the host, but not their perceived trustworthiness, was reliably associated with a price premium. They write, “A one standard deviation increase in perceived attractiveness was associated with a 2.78% price increase. As a comparison, a one standard deviation increase in review score was associated with a 5.26% price increase and the presence of an additional bedroom was associated with a 15.66% price increase.”
Interestingly, this finding contradicts the results of an earlier study, which found that hosts in Stockholm, Sweden were able to command a market premium to the extent that they were perceived as trustworthy (but not attractive). Naturally, this begs the question of whether the New York City rental market is particularly attuned to signals of attractiveness while the Stockholm market is more concerned with trustworthiness.
A few other interesting findings emerged. For one, the researchers did not find any effects related to gender; men and women were rated similarly on measures of perceived attractiveness and trustworthiness. They also reported that black hosts charged approximately 10% less for equally valuable apartments than white hosts. This is consistent with previous research and underscores the fact that race is an important determinant of value in online peer-to-peer selling markets.
Furthermore, perhaps taking a page out of the real-estate agent’s playbook, Airbnb hosts that showed more intense smiles in their photos were more likely to charge more for their rental apartments.
Returning to the key finding of the research, the authors suggest their results are less about the desire to seek out out attractiveness and more about the desire to avoid “ugliness.” For example, when the researchers separated out the least attractive hosts from the rest of the sample, they found that these hosts charged, on average, 6.82% less for their listings.
The authors conclude, “Our analysis of 1,020 apartments in New York City shows that more attractive-looking hosts charge higher prices for similar apartments, suggesting that consumers are willing to spend more on a night in an apartment if they are staying with a more attractive host. This effect was due to an ugliness penalty, rather than a beauty premium: Less attractive hosts charge lower prices whereas more attractive hosts do not charge higher prices.”