A Spatial Regression Model for Predicting Prices of Short-Term Rentals in Athens, Greece

Abstract

Short-term house rentals constitute a growing component of tourist accommodation in several countries and the determination of factors affecting rents is an important consideration in relevant studies. Short-term rentals have shown increasing trends in the city of Athens, Greece; however, this activity has not been adequately studied. In this paper, spatial data of Airbnb rentals in Athens are analyzed in order to indicate the factors which are important for the spatial variation of rents. Factors such as property capacity, host attributes and review characteristics are considered. In addition, several locational attributes are examined. Regression analysis techniques are used to predict the cost per night, according to various explanatory factors, while the results of two models are presented: ordinary least squares (OLS) and geographically weighted regression (GWR). The results of the OLS model indicate several factors determining the rent, including capacity and host characteristics, as well as locational attributes. The GWR model produces more accurate results with a smaller number of independent variables. For the residuals analysis several additional amenities were examined that resulted in a small impact on rents. The unexplained spatial variation of rents may be attributed to neighborhood characteristics, socioeconomic conditions and special characteristics of the rentals.