Spillovers in Asset Prices: The Curious Case of Haunted Houses

Utpal Bhattacharya (), Daisy Huang () and Kasper Meisner Nielsen ()
Additional contact information
Daisy Huang: Nanjing Audit University
Kasper Meisner Nielsen: Institute for Emerging Market Studies, Hong Kong University of Science and Technology

No 2019-63, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: Exploiting the unique institutional setting of Hong Kong's real estate market, we uncover a curious ripple effect of haunted houses on the prices of nearby houses. Prices drop on average 20% for units that become haunted, 5% for units on the same floor, 3% for units in the same block, and 1% for units in the same estate. Our study makes two contributions. First, our results provide an estimate of a large negative spillover on asset prices caused by an idiosyncratic shock to the perceived quality of an asset. Second, since we observe that this ripple effect exists even if the haunted house is not sold, we can isolate the quality channel from the price pressure channel. We find that the quality channel contributes significantly to spillovers in asset prices.

Pages: 46 pages
Date: 2019-05, Revised 2019-05
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://iems.ust.hk/assets/publications/working-papers-2019/iemswp2019-63.pdf First version, 2019 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hku:wpaper:201963

Access Statistics for this paper

More papers in HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies Contact information at EDIRC.
Bibliographic data for series maintained by Carla Chan ( this e-mail address is bad, please contact ).