TY - JOUR

T1 - The Assessment of Substitution Through Event Studies-An Application to Supply-Side Substitution in Berlin's Rental Market*

AU - Duso, Tomaso

AU - Michelsen, Claus

AU - Schaefer, Maximilian

AU - Tran, Kevin D.

PY - 2022/10/1

Y1 - 2022/10/1

N2 - • To assess supply side substitution, one needs to evaluate to what extent a firm that is not yet present in the market but has capabilities to repurpose its production capacity constitutes a competitive constraint to firms operating in the focalmarket.• In practice, the empirical assessment is often difficult because any effects observed upon entry of repurposed capacity are not necessarily caused by said entry alone, but potentially also by the specific market conditions in the focal market (so calledself-selection).• Policy interventions that affect entry decisions can alleviate such measurement concerns, as we show by assessing how regulations that limit the diffusion of Airbnb in Berlin affect the long-term rentalmarket by repurposing short-term rentals.• Supply side substitution between professional Airbnb hosts and the long-term rental market exists, but the stock of Airbnb apartments is not large enough to constitute a true competitive constraint.

AB - • To assess supply side substitution, one needs to evaluate to what extent a firm that is not yet present in the market but has capabilities to repurpose its production capacity constitutes a competitive constraint to firms operating in the focalmarket.• In practice, the empirical assessment is often difficult because any effects observed upon entry of repurposed capacity are not necessarily caused by said entry alone, but potentially also by the specific market conditions in the focal market (so calledself-selection).• Policy interventions that affect entry decisions can alleviate such measurement concerns, as we show by assessing how regulations that limit the diffusion of Airbnb in Berlin affect the long-term rentalmarket by repurposing short-term rentals.• Supply side substitution between professional Airbnb hosts and the long-term rental market exists, but the stock of Airbnb apartments is not large enough to constitute a true competitive constraint.

KW - Economics

UR - https://www.mendeley.com/catalogue/3697da01-3d0e-3cb4-be1e-796f98a292b8/

UR - http://www.scopus.com/inward/record.url?scp=85141984496&partnerID=8YFLogxK

U2 - 10.1093/jeclap/lpac014

DO - 10.1093/jeclap/lpac014

M3 - Journal articles

VL - 13

SP - 509

EP - 515

JO - Journal of European Competition Law and Practice

JF - Journal of European Competition Law and Practice

SN - 2041-7764

IS - 7

ER -