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Chinese Superstition and Real Estate Prices: Transaction-level Evidence from the US Housing Market

Author

Listed:
  • Brad R. Humphreys

    (West Virginia University, Department of Economics)

  • Adam Nowak

    (West Virginia University, Department of Economics)

  • Yang Zhou

    (West Virginia University, Department of Economics)

Abstract

We investigate the impact of Chinese superstition on prices paid by Chinese home buyers in Seattle, Washington. Chinese consider 8 lucky and 4 unlucky. Empirical results indicate Chinese buyers pay a 1-2% premium for addresses including an 8 and a 1% discount for addresses including a 4. These results are unrelated to unobserved property quality: no premium exists when Chinese sell to non-Chinese. Absent explicit identifiers for Chinese individuals, we develop a binomial name classifier using methods from the biomedical and document classification literature, allowing for falsification tests using other ethnic groups and mitigating ambiguity attributable to transliteration of Chinese characters into the Latin alphabet.

Suggested Citation

  • Brad R. Humphreys & Adam Nowak & Yang Zhou, 2017. "Chinese Superstition and Real Estate Prices: Transaction-level Evidence from the US Housing Market," Working Papers 17-18, Department of Economics, West Virginia University.
    • Handle: RePEc:wvu:wpaper:17-18
    as

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    File URL: http://busecon.wvu.edu/phd_economics/pdf/17-18.pdf
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    References listed on IDEAS

    as
    1. Ng, Travis & Chong, Terence & Du, Xin, 2010. "The value of superstitions," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 293-309, June.
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    3. Nicole M. Fortin & Andrew J. Hill & Jeff Huang, 2014. "Superstition In The Housing Market," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 974-993, July.
    4. Yang, Zili, 2011. "“Lucky” numbers, unlucky consumers," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 692-699.
    5. Shum, Matthew & Sun, Wei & Ye, Guangliang, 2014. "Superstition and “lucky” apartments: Evidence from transaction-level data," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 109-117.
    6. Agarwal, Sumit & He, Jia & Liu, Haoming & Png, I. P. L. & Sing, Tien Foo & Wong, Wei-Kang, 2016. "Superstition, Conspicuous Spending, and Housing Markets: Evidence from Singapore," IZA Discussion Papers 9899, Institute of Labor Economics (IZA).
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Superstition; supervised learning; hedonic price model; name matching;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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