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I think you're still conflating demand with transaction volume. Let me put it this way: > Furthermore, demand is also increased (demand for the amount of night

by Zarel 11y ago

I think you're still conflating demand with transaction volume. Let me put it this way: > Furthermore, demand is also increased (demand for the amount of nights) because visitors can stay cheaper (per night) so some stay longer. I.e. more demand. Demand is a curve. Visitors saying longer because they can stay cheaper just changes what part of the curve you're on, it doesn't change the curve itself. In other words: the demand was always there, that visitor would always have stayed longer if they could stay cheaper. The only difference is whether or not they have that option, which is a difference in supply, not demand.

roel_v 11y ago
Demand does go up, because people who earlier couldn't compete for the good we're talking about now can. There are x locations each night to sleep that are zoned for residential purposes, some more attractive than others. This is the supply. There are y people competing for those; y is roughly equal to the amount of people who have their primary residence there. Now y' people who are not primary residents start to compete for those places. Result: demand is y + y'. X remains constant (in the short term). Result: P goes up. The 'cheaper' meant compared to the prices of another market, i.e. the hotel market. This is a cumulative effect, on top of the first-order effect of those consumers being let into the market in the first place.