This thesis contains three essays studying competition, shipping costs, and the effects of regulation on real estate markets.
In the first paper, I study the impact of conditional free shipping determined by transaction value thresholds (TFS) on intermediary marketplaces. Specifically, it examines how TFS policies influence transaction conditions, product prices, and consumer demand. The analysis reveals that offering free shipping increases the costs of transacting, with higher prices and commission fees, compared to scenarios without free shipping. The price increase is driven by sellers passing on the higher marginal costs of selling as the marketplace raises commission fees to recover the expenses associated with offering free shipping. In multi-purchasing scenarios, prices rise contrary to standard multi-product Hotelling models. This is attributed to the marketplace’s optimal shipping policy, which segments consumers into high-demand (buying two products) and low-demand (buying one product) groups. Free shipping is selectively offered to high-demand consumers, effectively subsidising their willingness to pay, which enables higher prices and boosts platform revenues. These findings highlight the redistributive effects of conditional free shipping, showing that the costs are indirectly borne by consumers and sellers while the marketplace benefits from increased profitability. The study underscores the strategic role of TFS policies in shaping market dynamics and consumer behavior on intermediary platforms.
In the second paper, jointly with Riccardo Pesci, we examine the impact of a short-term rental (STR) regulation in Vienna that limits apartments to a maximum of 90 rental nights per year on the STR-market. Leveraging the policy as a quasi-natural experiment, we analyse its effects on key market outcomes. Using a difference-in-differences methodology with a restricted bandwidth around the city center’s border, we compare similar affected and unaffected areas. The findings reveal a reduction in the number of reserved nights without a significant change in the total number of active apartments or prices independent of quality. However, the regulation leads to a notable decrease in revenues for affected apartments compared to those unaffected. Additionally, the policy exerts a compositional effect, leading to the entry of apartments at lower price points with fewer amenities in regulated areas.
The third paper studies the impact of a STR regulation in Vienna on the long-term rental (LTR) housing and real estate market in Vienna. I adopt a triple Difference-in-Differences design (DDD), comparing prices in the regulated inner districts to the unregulated outer districts of Vienna and to the differences between inner and outer districts in Munich, where no STR regulation was in place. The analysis shows that after the regulation, rental rates of new apartments, whose rents are not regulated by the tenancy act, increased, whereas the STR regulation had no effect on old apartments and real estate prices. We further observe that the vacancy rate of apartments in regulated areas increased, suggesting that the STR regulation likely did not lead to a shift of apartments from the STR market to the LTR market but instead resulted in more apartments being kept vacant. Lastly, we observe a net positive effect on migration dynamics into the regulated inner districts of Vienna following the regulation.