Spillovers in Prices: The Curious Case of Haunted Houses*

Fire sales and house prices: evidence from estate sales due to sudden death

Utpal Bhattacharya, Daisy Huang and Kasper Meisner Nielsen

Review of Finance, 2021, vol. 25, issue 3, 903-935

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, 10% for units on the same floor, 7% for units in the same block, and 1% for units in the same estate. Our study makes two contributions. First, we provide an estimate of a large negative spillover on prices caused by a quality shock. Second, we find that the demand shock rather than the fire sale supply shock explains most of the spillover.

Keywords: Fire sales; Negative spillovers; Haunted houses (search for similar items in EconPapers)
JEL-codes: D62 H23 R21 R31 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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