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Superstition, Conspicuous Spending, and Housing Markets: Evidence from Singapore

36 Pages Posted: 29 Mar 2014 Last revised: 19 Apr 2016

Sumit Agarwal

Georgetown University - Department of Finance

Jia He

Nankai University

Haoming Liu

National University of Singapore (NUS) - Department of Economics

Ivan P. L. Png

National University of Singapore (NUS)

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

Wei-Kang Wong

National University of Singapore (NUS) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2016

Abstract

For most people, buying a home is their single largest financial commitment. Previous research shows that Chinese buyers pay less for homes with unlucky addresses and more for homes with lucky addresses. Using Singapore data on housing transactions combined with a plethora of individual buyer characteristics including ethnicity, age, nationality, education, and employment, we study the source of these preferences. We find evidence that buyers are heterogeneous. Consistent with superstition, older people, those who suffered from more traffic accidents, and people buying new apartments have stronger preference for lucky addresses, while people with Western names and senior public-sector employees have weaker preference. Consistent with conspicuous spending, people with Western names, senior public-sector employees, and people buying in luxury districts have weaker preference for lucky addresses.

Keywords: Superstition, conspicuous spending, real estate, prices, behavioral economics

JEL Classification: D1, R3, Z1

Suggested Citation

Agarwal, Sumit and He, Jia and Liu, Haoming and Png, Ivan P. L. and Sing, Tien Foo and Wong, Wei-Kang, Superstition, Conspicuous Spending, and Housing Markets: Evidence from Singapore (March 2016). Available at SSRN: https://ssrn.com/abstract=2416832 or http://dx.doi.org/10.2139/ssrn.2416832

Sumit Agarwal (Contact Author)

Georgetown University - Department of Finance ( email )

3700 O Street, NW
Washington, DC 20057
United States
202-687-8207 (Phone)

HOME PAGE: http://www.ushakrisna.com

Jia He

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Haoming Liu

National University of Singapore (NUS) - Department of Economics ( email )

10 Kent Ridge Crest
Singapore 119260
Singapore

Ivan P. L. Png

National University of Singapore (NUS) ( email )

Singapore, 117543
Singapore
+65 6516-6807 (Phone)

HOME PAGE: http://sites.google.com/site/iplpng/

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore

Wei-Kang Wong

National University of Singapore (NUS) - Department of Economics ( email )

AS2, 1 Arts Link
Singapore, 117570
Singapore

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