Every year, the University of Amsterdam is hosting the Econometric Game, one of the most prestigious projects organized by the study association for Actuarial Science & Econometrics (VSAE) of the University of Amsterdam. The participating universities are expected to send delegations of four students majoring in econometrics or relevant studies with a maximum of two PhD students. This year was the first online edition ever held due to the Corona pandemic. The teams were given a case study, which they had to solve in one day. The ten teams with the best solutions will continue to the final on day two. This was an extension of the case on day one and at the end of the day, all the finalists had to present their findings. The solutions were reviewed by a jury of qualified and independent professors.

The Econometric Game 2021 took place on the 8th and 9th of April 2021 in digital format. The theme of this edition was Airbnb and the housing market in Amsterdam.

This year’s casemaker is Martijn Dröes. He is currently an assistant professor real estate finance at the University of Amsterdam.

About the case

In the last decade the sharing economy has increased tremendously in both scope and size and it is now affecting all aspects of modern-day life. Some well-known examples include peer-to-peer lending, crowdfunding, ridesharing, and home sharing. A prime example of the sharing economy is Airbnb. There are currently 150 million users worldwide, 6 million listings in over 65,000 cities. The case for the Econometrics Game 2021 – prepared by Martijn Dröes from the University of Amsterdam – focusses on the local effects of Airbnb on
the housing market in Amsterdam.

The first listings in Amsterdam were in 2008 and have exploded exponentially. Besides having impact on the tourism/hotel industry, it
also has a major impact on the housing market. On the one hand, Airbnb raises money for local residents and the (local) economy, on the other hand the increasing flow of tourists also creates nuisance and noise pollution and raises concerns about better regulating the Airbnb inflows into the city. Which one of these aspects dominates is, a priori, unknown, but we would expect that these forces are affecting house prices (of individual houses) in Amsterdam. House prices in Amsterdam have been soaring with an increase of 65% within the 5
years prior to 2018. To what extent might the increased popularity of Airbnb be to blame? Although recently house prices have stabilized in Amsterdam, there is a genuine concern whether the current shortages as observed in many part in the Netherlands are exacerbated by the presence of Airbnb.

With the help of Brainbay/The Dutch Association of Realtors, detailed microdata on house prices and Airbnb listings are made available for the international teams to analyze. Advanced econometric techniques are necessary to model the relationship between Airbnb and house prices and to examine whether the effect of Airbnb is causal. How to deal with and regulate Airbnb is high up the political agenda of many cities. The findings of the different teams could help in the debate regarding this issue, within Amsterdam and more broadly, on how to facilitate and/or regulate Airbnb and how to better integrate the sharing economy with the mainstream economy: to innovate as a city while remaining accessible and livable for local residents.

Econometric Game 2021 – Case A
Econometric Game 2021 – Case B

Lund University won the 2021 edition.

The top 3:

1. Lund University
   Lund_Case_A_2021
   Lund_Case_B_2021
2. Vrije Universiteit Amsterdam
   VU_Case_A_2021
   VU_Case_B_2021
3. University of Cambridge
   Cambridge_Case_A_2021
   Cambridge_Case_B_2021

The other finalist were: 

Aarhus University,
Erasmus University Rotterdam,
New Economic School,
Stellenbosch University,
University of Antwerp,
Université de Lausanne,
Norwegian School of Economics

You can watch the final presentations of all the finalists here: