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

Sumit Agarwal (), Jia He (), Haoming Liu, Ivan Png, Tien Foo Sing and Wei-Kang Wong ()
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Sumit Agarwal: National University of Singapore
Jia He: National University of Singapore
Wei-Kang Wong: National University of Singapore

No 9899, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 (search for similar items in EconPapers)
JEL-codes: D1 R3 Z1 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2016-04
New Economics Papers: this item is included in nep-pke, nep-sea and nep-ure
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Citations: View citations in EconPapers (6)

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