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An Estimation of the Impact of Feng-Shui on Housing Prices in Taiwan : A Quantile Regression Application

Author

Listed:
  • Chu-Chia Lin

    (Professor, Department of Economics, National Chengchi University, Taipei, Taiwan)

  • Chien-Liang Chen

    (Professor, Department of Economics, National Chi-Nan University, Nan-Tou County, Taiwan)

  • Ya-Chien Twu

    (M.A., Department of Economics, National Chengchi University, Taipei, Taiwan)

Abstract

Feng-shui is an old and traditional body of knowledge in Chinese society. Feng-shui has a significant influence on many aspects in daily life for most Chinese, including choosing locations for dwelling units, offices, burial sites, and so on. However, there have been few studies on the impact of feng-shui on housing prices. By applying a housing hedonic equation and a data set of 77,624 observations in Taiwan, we have attempted to estimate the impact of feng-shui on housing prices. We find that all six types of bad feng-shui have a significantly negative impact on housing prices. Moreover, by applying a quantile regression, we find that most of the bad feng-shui has a stronger negative impact on expensive dwelling units. Our findings confirm that people who buy expensive housing units care about feng-shui more than those who buy less expensive housing units.

Suggested Citation

  • Chu-Chia Lin & Chien-Liang Chen & Ya-Chien Twu, 2012. "An Estimation of the Impact of Feng-Shui on Housing Prices in Taiwan : A Quantile Regression Application," International Real Estate Review, Global Social Science Institute, vol. 15(3), pages 325-346.
    • Handle: RePEc:ire:issued:v:15:n:03:2012:p:325-346
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    References listed on IDEAS

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    1. Goodman, Allen C., 1978. "Hedonic prices, price indices and housing markets," Journal of Urban Economics, Elsevier, vol. 5(4), pages 471-484, October.
    2. Steven C. Bourassa & Vincent S. Peng, 1999. "Hedonic Prices and House Numbers: The Influence of Feng Shui," International Real Estate Review, Global Social Science Institute, vol. 2(1), pages 79-93.
    3. Lin, Chu-Chia Steve, 1993. "The Relationship between Rents and Prices of Owner-Occupied Housing in Taiwan," The Journal of Real Estate Finance and Economics, Springer, vol. 6(1), pages 25-54, January.
    4. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    5. Goodman, Allen C. & Kawai, Masahiro, 1982. "Permanent income, hedonic prices, and demand for housing: New evidence," Journal of Urban Economics, Elsevier, vol. 12(2), pages 214-237, September.
    6. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January.
    7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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    Cited by:

    1. Lin, Jen-Jia & Cheng, Yu-Chun, 2016. "Access to jobs and apartment rents," Journal of Transport Geography, Elsevier, vol. 55(C), pages 121-128.
    2. Yen-Jong Chen & Cheng-Kai Hsu, 2020. "Comparison of Housing Price Elasticities Resulting from Different Types of Multimodal Rail Stations in Kaohsiung, Taiwan," International Real Estate Review, Global Social Science Institute, vol. 23(3), pages 1043-1058.
    3. Yen-Jong Chen & Cheng-Kai Hsu, 2020. "Comparison of Housing Price Elasticities Resulting from Different Types of Multimodal Rail Stations in Kaohsiung, Taiwan," International Real Estate Review, Global Social Science Institute, vol. 23(3), pages 417-432.

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    More about this item

    Keywords

    Feng-shui; Hedonic Equation; Quantile Regression;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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