Speculating on Superstition: Evidence from Housing Transactions in Hungry Ghost Months in Singapore

39 Pages Posted: 30 Oct 2018

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Hyun-Soo Choi

KAIST College of Business

Jia He

Nankai University

Tien Foo Sing

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

Date Written: June 14, 2016

Abstract

This paper aims to study the behavior of superstitious and non-superstitious investors surrounding the superstition that buying or selling during the Hungry Ghost month (typically August) will be inauspicious. We find that superstitious Chinese homebuyers pay 1.41% lower on average per square meter price for houses bought in the Hungry Ghost month than houses bought outside the Hungry Ghost month. We find that older Chinese, aged above 40 years who are more likely to be superstitious, pay a lower price relative to younger Chinese. On the other hand, the younger Chinese investors, who are more likely to be non-superstitious, speculate on the Hungry Ghost effects and buy cheaper. However, their investment strategies of timing buy-and-sale activities around the Hungry Ghost month do not yield significant abnormal returns.

Keywords: Hungry Ghost Month, Superstitious Behavior, Housing Price, Non-Superstitious Investors, Speculation

JEL Classification: D1, R3, Z1

Suggested Citation

Agarwal, Sumit and Choi, Hyun-Soo and He, Jia and Sing, Tien Foo, Speculating on Superstition: Evidence from Housing Transactions in Hungry Ghost Months in Singapore (June 14, 2016). Available at SSRN: https://ssrn.com/abstract=3261730 or http://dx.doi.org/10.2139/ssrn.3261730

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

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

Hyun-Soo Choi

KAIST College of Business ( email )

85 Hoegiro, Dongdaemoon-gu
Seoul
Korea, Republic of (South Korea)
8229583592 (Phone)

Jia He

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Tien Foo Sing (Contact Author)

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

4 Architecture Drive
Singapore 117566
Singapore

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