Superstition and モluckyヤ apartments: Evidence from transaction-level data

Shum, Matthew, Sun, Wei, and Ye, Guangliang—Superstition and ‘‘lucky’’ apartments: Evidence from transaction-level data 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 235 RMB 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, 6.9 days 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. Journal of Comparative Economics 42 (1) (2014) 109–117. Division of Humanities and Social Sciences, California Institute of Technology, MC 228-77, Pasadena, CA 91125, USA; Hanqing Advanced Institute of Economics and Finance, School of Economics/Finance, Renmin University of China, Haidian District, Beijing 100872, PR China. 2013 Association for Comparative Economic Studies Published by Elsevier Inc. All rights reserved.