When Certification Backfires: Negative Spillovers on Noncertified Offerings in Airbnb Plus

Research on certification has largely emphasized its positive effects, showing that certification can enhance trust and legitimacy for certified actors and in some cases, generate positive spillovers that benefit uncertified counterparts. Yet, certification programs are frequently scaled back or discontinued, suggesting that their broader consequences may be more complex than commonly assumed. In particular, certification can produce negative spillovers by sharpening distinctions between certified and noncertified actors; through a contrast mechanism, juxtaposition with certified offerings heightens the salience of uncertainty and leads audiences to evaluate noncertified actors less favorably, even when underlying quality is unchanged. We test this argument using data from the launch of Airbnb Plus, a program in which Airbnb certified a subset of listings based on verified quality standards. Employing a difference-in-differences design comparing Los Angeles (where the program was launched) and San Diego (where it was not), we find a negative treatment effect on the revenues of noncertified listings in Los Angeles. This negative spillover is attenuated when alternative quality signals are available, when noncertified listings are less directly comparable with certified ones, and when listings are more difficult to substitute outside the platform. Our findings suggest how certification systems intended to enhance trust and legitimacy can under certain market conditions inadvertently disadvantage noncertified actors.

Funding: We benefited from the Cornell Management and Organizations Ph.D. Student Research Grant for this project.