Start Date

10-12-2017 12:00 AM

Description

In the recent decade, the short-term rental market is growing at a rapid rate. But some negative issues have followed. Trust has been regarded as one of the main impediments to the development of the short-term rental industry. In 2016, Xiaozhu.com encouraged hosts to present their Zhima Credit-a most popular third party online credit scoring in China- as a way to earn trust. We collect data of hosts in Shanghai and Beijing before and after they post Zhima Credit and conduct a difference-in-difference analysis to figure out whether reservations would be influenced by this action. According to our study, the entry of Zhima Credit does have a positive impact on the hosts’ reservations on Xiaozhu.com and the effect will last for quite a long time.

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Dec 10th, 12:00 AM

Does Online Credit Scoring Matter: An Empirical Analysis of the Effect of Zhima Credit on Short-Term Rental

In the recent decade, the short-term rental market is growing at a rapid rate. But some negative issues have followed. Trust has been regarded as one of the main impediments to the development of the short-term rental industry. In 2016, Xiaozhu.com encouraged hosts to present their Zhima Credit-a most popular third party online credit scoring in China- as a way to earn trust. We collect data of hosts in Shanghai and Beijing before and after they post Zhima Credit and conduct a difference-in-difference analysis to figure out whether reservations would be influenced by this action. According to our study, the entry of Zhima Credit does have a positive impact on the hosts’ reservations on Xiaozhu.com and the effect will last for quite a long time.