Superstition and 'Lucky' Apartments: Evidence from Transaction-Level Data

Shum, Matthew; Sun, Wei; Ye, Guangliang

doi:10.2139/ssrn.2700810

Cited by 28 publications

(42 citation statements)

References 10 publications

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“…If, on the contrary, individual investors take lucky/unlucky numbers into account when submitting limit orders, it would lead to a disproportionately large (small) volume of limit orders submitted at prices ending with lucky (unlucky) numbers. This gives us our first hypothesis: 14 See, for example, Agarwal, He, Liu, Png, Sing, and Wong (2014); Shum, Sun, and Ye (2014); and Fortin, Hill, and Huang (2014). 15 Dichev and Janes (2003), Yuan, Zheng, and Zhu (2006), and Lepori (2009) show that the occurrence of negative superstitious events (i.e.…”

Section: A Limit Orders Submitted At Prices Ending With Lucky and Unmentioning

confidence: 96%

Do Superstitious Traders Lose Money?

et al. 2018

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Do superstitious traders lose money?We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number "8" is lucky and the number "4" is unlucky. We find that individual investors, but not institutional investors, submit disproportionately more limit orders at "8" than at "4." This imbalance, defined as "superstition index" for each investor, is positively correlated with trading losses. Superstitious investors lose money mainly because of their bad market timing and stale orders. Nevertheless, the reliance on number superstition for limit order submissions does decrease with trading experience. AbstractDo superstitious traders lose money? We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number "8" is lucky and the number "4" is unlucky. We find that individual investors, but not institutional investors, submit disproportionately more limit orders at "8" than at "4." This imbalance, defined as "superstition index" for each investor, is positively correlated with trading losses. Superstitious investors lose money mainly because of their bad market timing and stale orders. Nevertheless, the reliance on number superstition for limit order submissions does decrease with trading experience.

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Section: A Limit Orders Submitted At Prices Ending With Lucky and Unmentioning

confidence: 96%

Do Superstitious Traders Lose Money?

et al. 2018

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“…Numerology influences pricing strategies and buyer behavior; for example, pre-owned condos in Chengdu and Hong King sell at higherprices and newly built condos sell more swiftly if located on a floor ending in '6' or '8' (Chau, Ma and Ho, 2001). Consumers with a phone number containing more '8s' are more likely to purchase a condo on a floor ending in '8' (Shum, Sun and Ye, 2014). Chinese residents in Auckland, Singapore, and Vancouver pay a premium price for houses with an address ending in a lucky number (especially '8') and a discounted price if ending in '4' (Agarwal et al, 2014;Bourassa and Peng, 1999;Fortin, Hill and Huang, 2013;Ho, 2008).…”

Section: Superstition Literaturementioning

confidence: 99%

“…As noted previously, numerological beliefs can distort real estate prices relative to general market conditions (Shum, Sun and Ye, 2014); thus, property valuations (and concomitant property taxes) based on prior sales should be adjusted accordingly. For example, state governments should discourage unaffordable lottery ticket purchases by probability-naï ve players; in this case, lottery ads should deter consumers from buying tickets instead of life necessities based on beliefs about 'lucky numbers' and 'hitting the big one'.…”

Section: Managerial Implicationsmentioning

confidence: 99%

Intrinsic Religiosity and Attitude toward Finales as Precursors of Superstitious Beliefs: A Cross-Cultural Investigation

Sierra¹,

Hyman²,

Lee³

et al. 2017

AJBR

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Leaning on the theoretical tenets of experiential consumption and attitude process literatures, this cross-cultural research uses path analysis to examine antecedents and consequences of superstitious beliefs. For the Korean data, attitude toward finales fully mediates the relationship between intrinsic religiosity and superstitious beliefs. For the U.S. data, intrinsic religiosity has no effect on either attitude toward finales or superstitious beliefs. For both samples, (1) attitude toward finales has a positive effect on suspension of disbelief, and (2) attitude toward zodiac signs and zodiac sign expertise relate positively to superstitious beliefs. This research adds to the religiosity and superstition literatures by exploring carefully selected yet under-researched antecedents and consequences of consumers' superstitious beliefs. The mediation effect for Korean respondents and model differences between the Korean and U.S. respondent sets provide novel empirical results.

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“…Several papers identify a price premium for lucky properties, where luck is identified by a number 8 in the property's location, such as the floor level or street number (Chau et al, 2001;Shum et al, 2014;Bourassa and Peng, 1999;Fortin et al, 2014). While a preference for prices ending in 8 is identified in Asian stock market trades (Brown and Mitchell, 2008;Brown et al, 2002) and consumer goods market price setting (Simmons and Schindler, 2003), no previous papers have considered whether a similar preference exists in real estate markets.…”

Section: Introductionmentioning

confidence: 99%

The cost of a lucky price

Chau¹,

Wright²,

Liusman³

2018

25th Annual European Real Estate Society Conference

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Real estate buyers pay a premium for lucky properties. Using a large sample of Hong Kong apartment sales, we show that the transaction price itself is priced as a property attribute when it ends in a lucky 8 digit. This explains our observation of price clustering. Hedonic regression modelling is used to show that properties which sell at a lucky price also sell for a 1.4 percent premium, on average. Unlike lucky floor premium, lucky price premium does not exhibit luxury goods characteristics and is not sensitive property price cycles. This shows that the lucky price premium is attributed to cultural heuristics. The results are robust to alternative model specifications.

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Superstition and 'Lucky' Apartments: Evidence from Transaction-Level Data

Cited by 28 publications

References 10 publications

Do Superstitious Traders Lose Money?

Do Superstitious Traders Lose Money?

Intrinsic Religiosity and Attitude toward Finales as Precursors of Superstitious Beliefs: A Cross-Cultural Investigation

The cost of a lucky price

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