Writing Resources
Mitigating factors to consider is that demand is dependent on the tastes and preference of consumers meaning that a decrease in demand for hotel rooms or an increase in demand for Airbnb is difficult to predict as tastes and preferences vary amongst consumers Undeniably as microeconomic theory suggests every decision carries a degree of opportunity cost Begg and Ward 2016 p 9 A look at the decisions faced by landlords in the housing market to more efficiently allocate resources by pursuing the more lucrative short term rental market where they have flexibility to change the price and availability rather than fixed long term rentals to tenants Zee 2016 However the increase in frequency of guests carries an increased risk of wear and tear on capital investment which can have a devaluating effect Coppola 2016 Equally important is that opportunity cost especially in times of scarcity in the market affects consumers who for example need to pay more for housing rental reducing disposable income and affecting demand of other goods and services
These factors contribute to the macroeconomic factors of national income personal consumption and domestic investment Macroeconomics Analysts at Credit Suisse denotes that About half of total GDP is composed of sectors which are significantly affected by sharing It must be noted that although no systems have been developed to measure the contribution of the sharing economy toward GDP analysts believe the sharing economy's impact on GDP can be rationally estimated Feubli and Horlacher 2015 and may even reduce total GDP Hwang 2014 When considering the impact of Airbnb from macroeconomic perspectives Say's law implies that supply of goods and services will lead to increased consumer demand Kates 1997 Khan 2018 that will benefit various industries throughout the economy
