Next time you are browsing Airbnb listings, you could find that there is more to consider than simply amenities and price.
To stand out from the competition, some Airbnb hosts tout personal values equivalent to honesty, empathy and conscientiousness of their property listings. This sort of display has been called “virtue signaling.” While the phrase could also be derisive, we use it here as a neutral description of a business tactic: Virtue signaling occurs when a business entity communicates to a audience that it has a purpose beyond providing a service for profit.
Virtue signaling isn’t a brand new phenomenon, but navigating it remains to be a challenge for entrepreneurs. Yes, it’s thin line between having a meaningful dialogue about value and telling customers what they need to hear. Previous research about business and virtue signaling it is essentially mixedand this was the major focus of the students how investors – not consumers – react to it.
As professors who study entrepreneurship, we wanted to higher understand how consumers respond to the language of virtues – particularly, whether it makes them willing to pay more within the sharing economy. So we checked the language utilized in over 80,000 Airbnb listings. We found that virtue signaling does get people to pay their dues – but only to some extent.
Virtue signaling within the sharing economy
Airbnb is the most important accommodation provider within the sharing economy, with over 2 million lively listings within the US. Hosts – or Airbnb travel entrepreneurshow the corporate likes to describe them – list their private rooms, apartments or entire houses with descriptions of properties available for rent to guests.
Airbnb provides hosts with a wise pricing tool that calculates a nightly rental price based on aspects equivalent to the property’s location and amenities. However, hosts may charge greater than Airbnb’s pricing tool recommends. Convincing guests to pay an extra charter feehosts often provide additional, more personal information of their listings concerning the property.
To understand if it’s price it, we analyzed 81,799 Airbnb listing descriptions in 12 cities across the United States. We calculated the share of virtue language using word lists covering six dimensions of virtue: conscientiousness, courage, empathy, honesty, warmth and enthusiasm. For example, hosts may describe their space as “friendly” or “neighborly” to emphasize warmth, or comment on their “supportive” or “compassionate” nature to show empathy for potential guests.
Our findings, published in a number one entrepreneurship journal, show that the value hosts can charge to use Airbnb is influenced by the quantity of virtue signaling of their list.
We found that lower levels of virtue signaling in Airbnb listings help hosts secure more bookings at the next price, while an excessive amount of virtue signaling hurts the business. In particular, a number who uses a little bit of virtuous language earns a mean of $1,098 more every year than the common host in our sample. At the identical time, excessive talk of virtue causes a lack of over $4,964.
So why are people less willing to pay more to Airbnb hosts who value their advantages essentially the most?
We imagine all of it comes down to trust. Consumers find virtue language reasonable and trustworthy. However, higher levels of virtue signaling could seem unfair. We found support for this concept in one other survey experiment involving almost 500 participants. In this experiment, we found that Airbnb listings that contained loads of foul language were more likely to be accepted perceived as unfair by study participants.
As entrepreneurs struggle to communicate their values and beliefs to consumers, our research confirms that communicating a modest dose of virtues can improve outcomes with consumers.
What about Airbnb Superhosts?
Perhaps a very powerful status symbol on Airbnb is Superhost badge, which hosts earn over time based on their overall rating, response rate, and other quality metrics. The badge confirms the host’s good popularity and is clearly visible on property listings.
Our findings show that the effect of virtue signaling is stronger for Airbnb superhosts. In other words, just a little virtue paid off more for Superhosts, but excessive virtue signaling hurt them more.
These findings show that customers generally respond otherwise to Airbnb superhosts’ value signaling and show that such hosts needs to be especially careful when using such language of their listings.
Navigating the political minefield
Airbnb hosts, like other entrepreneurs, must also consider the political context by which they operate. political psychology he showed it conservatives and liberals are different when making value-laden decisions.
Our results show that hosts offering listings in conservative-leaning counties respond more strongly to consumer cues of advantage. We suspect it’s because conservatives imagine it’s unfair to overestimate one’s ethical nature, while liberals see it as a function of the business environment by which Airbnb hosts compete. These findings show that entrepreneurs needs to be especially careful when using virtue language in additional conservative counties.
Understanding how consumers respond to displays of value is vital, especially within the sharing economy. Our research shows that when it comes to public displays of virtue, little may help.