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Superstition and “lucky” apartments: Evidence from transaction-level data

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  • Shum, Matthew
  • Sun, Wei
  • Ye, Guangliang

Abstract

Using a sample of apartment transactions during 2004–2006 in Chengdu, China, we investigate the impact of superstitions in the Chinese real estate market. Numerology forms an important component of Chinese superstitious lore, with the numbers 8 and 6 signifying good luck, and the number 4 bad luck. We find that secondhand apartments located on floors ending with “8” fetch, on average, a 235RMB higher price (per square meter) than on other floors. For newly constructed apartments, this price premium disappears due to uniform pricing of new housing units, but apartments on floors ending in an “8” are sold, on average, 6.9days faster than on other floors. Buyers who have a phone number containing more “8”’s are more likely to purchase apartments in a floor ending with “8”; this suggests that at least part of the price premium for “lucky” apartments arises from the buyers’ superstitious beliefs.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jcecon:v:42:y:2014:i:1:p:109-117
    DOI: 10.1016/j.jce.2013.10.001
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    References listed on IDEAS

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    Cited by:

    1. Anderson, Michael L. & Lu, Fangwen & Zhang, Yiran & Yang, Jun & Qin, Ping, 2016. "Superstitions, street traffic, and subjective well-being," Journal of Public Economics, Elsevier, vol. 142(C), pages 1-10.
    2. Ya’akov M. Bayer, Bradley J. Ruffle, Ze’ev Shtudiner, Ro’i Zultan, 2018. "Costly Superstitious Beliefs: Experimental Evidence," LCERPA Working Papers 0114, Laurier Centre for Economic Research and Policy Analysis, revised 01 Mar 2018.
    3. Tang, Mingzhe & Coulson, N. Edward, 2017. "The impact of China's housing provident fund on homeownership, housing consumption and housing investment," Regional Science and Urban Economics, Elsevier, vol. 63(C), pages 25-37.
    4. Elena B. Pokryshevskaya & Evgeny A. Antipov, 2015. "A study of numerological superstitions in the apartments market," Economics Bulletin, AccessEcon, vol. 35(1), pages 83-88.
    5. 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.
    6. Jan Fidrmuc & J. D. Tena, 2015. "Friday the 13th: The Empirics of Bad Luck," Kyklos, Wiley Blackwell, vol. 68(3), pages 317-334, August.
    7. Evgeny A. Antipov & Elena B. Pokryshevskaya, 2015. "Are buyers of apartments superstitious? Evidence from the Russian real estate market," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 10(6), pages 590-592, November.
    8. Brad R. Humphreys & Adam Nowak & Yang Zhou, 2016. "Cultural Superstitions and Residential Real Estate Prices: Transaction-level Evidence from the US Housing Market," Working Papers 16-27, Department of Economics, West Virginia University.
    9. Tong V. Wang & Rogier J. D. Potter van Loon & Martijn J. van den Assem & Dennie van Dolder, 2016. "Number preferences in lotteries," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 11(3), pages 243-259, May.
    10. Ke, Wen-Chyan & Chen, Hueiling & Lin, Hsiou-Wei W. & Liu, Yo-Chia, 2017. "The impact of numerical superstition on the final digit of stock price," The North American Journal of Economics and Finance, Elsevier, vol. 39(C), pages 145-157.
    11. 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 for the Study of Labor (IZA).
    12. repec:ers:journl:v:xx:y:2017:i:3b:p:686-707 is not listed on IDEAS

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