Abstract
This dissertation consists of three chapters, each exploring research questions within the field of Urban Economics. Over the course of three papers, I examined how real estate markets and local economic activity responded to certain urban phenomenons, using large and novel administrative datasets from the United Kingdom and Portugal.
In the first chapter, I delved into the impact of Business Improvement Districts (BIDs) on housing markets, in Greater London. BIDs are entities funded by business owners, which provide additional public services, within their perimeter. By employing cutting-edge difference-in-difference techniques, I calculate that BID openings led to an increase in house prices by at least 3%, with no visible effect on housing supply. Moreover, I show that blocks exposed to BIDs display a lower growth in the share of minorities and unemployed residents.
In the second chapter, I estimate the effects of short-term rentals on house prices, in the two Portuguese metropolitan areas, using a policy change in 2014 that led to an exponential variation in the number of such type of accommodation. I employ a two-way fixed effects model, retrieving that a one-unit increment in the number of short-term rentals per quarter results in a 0.142%-0.272% increase in the value of transactions, over the period 2010-2017. I also document positive spillovers to commercial properties and a decrease in the number of transactions of new buildings.
In the last chapter, I continue to explore the economic consequences of short-term rentals, by analysing its impact on the performance of local businesses. Hence, I estimate the effect of exposure to short-term rentals, at the civil parish level, on the evolution of certain outcome variables between 2016-2019. Higher exposure to short-term rentals is positively linked with firm closure, especially for low performance firms. It also leads to increases in sales for both resident and tourist-oriented, with the latter also experiencing increments in the number of employees, wages and liquidity. Moreover, higher treatment intensity increases the probability of an entry firm being tourist-oriented.