Good luck, bad luck, and risk taking: Evidence from a natural experiment in the housing lottery

Feng Li, Xintao Wang and Ping Lu

Economics Letters, 2022, vol. 218, issue C

Abstract: This study investigates whether random shock signals affect individuals’ investment decisions of risk taking using a unique data set from the housing lottery in Hangzhou, a major city in eastern China. New housing projects in Hangzhou are sold to individuals through housing lotteries with price caps. Our empirical evidence suggests that individuals’ subsequent housing lottery decisions are significantly affected by their prior lottery results. After experiencing better lottery outcomes, which are purely driven by good luck, they tend to participate in hot projects with low lottery winning rates, taking more risks, and vice versa. However, this effect diminishes over time.

Keywords: Housing lottery; Pure luck; Risk taking (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176522002580
Full text for ScienceDirect subscribers only

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:eee:ecolet:v:218:y:2022:i:c:s0165176522002580

DOI: 10.1016/j.econlet.2022.110740

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().