4 ms·
Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? No. Therefore, externality.
by p0pcult 4y ago
Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? No. Therefore, externality.
- lmm 4y ago> Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? Yes - the market-clearing price of housing reflects all the demand for housing, whether that's being paid by renters, AirBnB, local authorities or whoever.
- s1artibartfast 4y agoPeople often mistake causality for externality, so much so the outside of Economics circles the two are being conflated. Airbnb can cause rent to go up, but that doesn't make it an externality. An externality is an input that you're using up or an output that you're not paying for. Businesses and individuals can have all kinds of negative effects on others that are not externalities.