TY - JOUR
T1 - Reviews and price on online platforms
T2 - Evidence from sentiment analysis of Airbnb reviews in Boston
AU - Lawani, Abdelaziz
AU - Reed, Michael R.
AU - Mark, Tyler
AU - Zheng, Yuqing
N1 - Publisher Copyright:
© 2018 Elsevier B.V.
PY - 2019/3
Y1 - 2019/3
N2 - There is a growing interest in deriving value from user-generated comments and reviews online. For businesses and consumers using online platforms, the reviews serve as quality metrics and influence consumers purchasing decision. This study examines the relationship between guests’ reviews, used as a proxy for quality, and the price set by hosts on the Airbnb platform in Boston. Using sentiment analysis to derive the quality from the reviews and a hedonic spatial autoregressive model applied to rental room prices on Airbnb, we find that prices are strategic complements and are influenced by the review score, the characteristics of the room, and the features of the neighborhood. The marketing implication is that consumers respond to the contents of online reviews, in addition to customer ratings. Policies that improve the quality of the room for one host will have a spillover effect on the price of rooms offered by other hosts.
AB - There is a growing interest in deriving value from user-generated comments and reviews online. For businesses and consumers using online platforms, the reviews serve as quality metrics and influence consumers purchasing decision. This study examines the relationship between guests’ reviews, used as a proxy for quality, and the price set by hosts on the Airbnb platform in Boston. Using sentiment analysis to derive the quality from the reviews and a hedonic spatial autoregressive model applied to rental room prices on Airbnb, we find that prices are strategic complements and are influenced by the review score, the characteristics of the room, and the features of the neighborhood. The marketing implication is that consumers respond to the contents of online reviews, in addition to customer ratings. Policies that improve the quality of the room for one host will have a spillover effect on the price of rooms offered by other hosts.
KW - Airbnb
KW - Price competition
KW - Reviews
KW - Sentiment analysis
KW - Spatial hedonic price
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U2 - 10.1016/j.regsciurbeco.2018.11.003
DO - 10.1016/j.regsciurbeco.2018.11.003
M3 - Article
AN - SCOPUS:85060347768
SN - 0166-0462
VL - 75
SP - 22
EP - 34
JO - Regional Science and Urban Economics
JF - Regional Science and Urban Economics
ER -