When perusing the wide array of listings on Airbnb, it is often tempting to focus solely on the amenities and prices. However, it has come to light that virtue signaling, the act of showcasing personal values to distinguish oneself, is also a significant factor to take into account. This strategy is employed to convey a sense of purpose beyond mere profit-making, and has become a prominent topic among entrepreneurs. The question at hand is whether this approach truly yields positive results.
As academics delving into the realm of entrepreneurship, we sought to delve deeper into this subject. Our aim was to ascertain how consumers respond to virtue language and whether it influences their willingness to pay more in the sharing economy. After examining over 80,000 Airbnb listings, we uncovered some compelling findings.
Airbnb is a pivotal player in the sharing economy, boasting a vast number of listings across the United States. Hosts employ various strategies to attract potential guests, one of which involves incorporating virtue language into their property descriptions. Our investigation focused on 81,799 Airbnb listings in 12 U.S. cities, where we evaluated the prevalence of virtue language in each description across six dimensions: conscientiousness, courage, empathy, integrity, warmth, and zeal.
The results of our study, which has been published in a reputable entrepreneurship journal, unveiled an intriguing correlation. We found that moderate levels of virtue signaling in Airbnb listings enabled hosts to command higher prices. However, an excessive use of virtue language had a detrimental effect, leading to a decrease in revenue. This suggests that there is indeed an optimal balance when it comes to integrating virtue language into Airbnb listings.
The rationale behind this lies in the concept of trust. Consumers respond positively to a reasonable amount of virtue language, perceiving it as trustworthy. However, an excessive amount of virtue signaling can be perceived as insincere and deceitful. Our subsequent survey experiment, involving nearly 500 participants, reinforced this notion. Listings inundated with virtue language were viewed as less genuine by the study participants.
One of the most coveted accolades for Airbnb hosts is the Superhost badge, which is conferred upon hosts based on their ratings and response rates. Interestingly, our findings demonstrated that the impact of virtue signaling is more pronounced for Airbnb Superhosts. A moderate use of virtue language had a notably positive effect on Superhosts, but excessive virtue signaling had an even greater negative impact on their revenue.
In addition to the level of virtue signaling, the political climate of the location also influences consumer reactions. We observed that in more conservative-leaning areas, consumers displayed stronger responses to virtue signaling. This difference in reaction can be attributed to the differing values and perceptions of the two political leanings. This highlights the significance of tailoring virtue language based on the political climate of the area.
Ultimately, our research underscores the importance of striking the right balance in virtue signaling for success, particularly in the sharing economy. As entrepreneurs navigate the complex terrain of conveying their values to consumers, it is clear that moderation is vital. In essence, a moderate use of virtue language can have a significant impact. Therefore, when perusing Airbnb listings, it is important to consider the influence of virtue signaling on consumer behaviour and its effect on pricing.