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Cultural Superstitions and Residential 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

In Chinese culture, the number 8 is considered lucky and 4 is considered unlucky. We analyze the relationship between the presence of 8s and 4s in addresses and transaction prices paid by Chinese home buyers and sellers in a novel setting, Seattle, Washington, from 1990 to 2015. In the absence of explicit identifiers for Chinese individuals, we develop a probabilistic model for identifying ethnicity based on name alone. The results indicate Chinese buyers pay a 1-2% premium for addresses that include an 8 and 1% less for properties with a 4 in the address. These results are not related to unobserved property quality as there is no premium when Chinese sell properties with an 8 in the address. These results suggest that some Chinese home buyers in Seattle retain their Chinese cultural superstitions.

Suggested Citation

  • 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.
    • Handle: RePEc:wvu:wpaper:16-27
    as

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    File URL: http://busecon.wvu.edu/phd_economics/pdf/16-27.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Nowak, Adam & Sayago-Gomez, Juan, 2018. "Homeowner preferences after September 11th, a microdata approach," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 330-351.

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    More about this item

    Keywords

    Superstition; property value; supervised learning; hedonic price model;
    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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