The rise and fall of short-term rentals: using app data to evaluate the impact of Covid-19 on local economic activity

We study the causal impact of COVID-19’s negative shock on short-term rentals in Lisbon’s local economy. Our difference-in-differences strategy uses a treatment relying on the pre-pandemic short-term rentals intensity, at the parish level, using unexploited app data, between 2018Q3 and 2020Q3. The number of likes and comments measure the economic activity level. The results suggest that likes and comments fell by 48.6%and 56.1%, for Cafes, and by 69.6% and 56.1%, for Pastries. Likes and comments fellin restaurants of treated are as vis-`a vis in comparison areas. Our results are robust to including Porto and other exercises restricting the sample period