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Superstition and real estate prices: transaction-level evidence from the US housing market

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  • Brad R. Humphreys
  • Adam Nowak
  • Yang Zhou

Abstract

We investigate the impact of superstition on prices paid by Chinese-American home buyers. Chinese consider 8 lucky and 4 unlucky. Lacking explicit buyer ethnicity identifiers, we develop a binomial name classifier, a machine learning approach applicable to any data set containing names, that allows for falsification tests using other ethnic groups, and mitigates ambiguity from the transliteration of Chinese characters into the Latin alphabet. Chinese buyers pay 1–2% premiums for addresses including an 8 and 1% discounts for addresses including a 4. These results are unrelated to unobserved property quality; no premium exists when Chinese sell to non-Chinese. The persistence of superstitions reflects the extent of cultural assimilation.

Suggested Citation

  • Brad R. Humphreys & Adam Nowak & Yang Zhou, 2019. "Superstition and real estate prices: transaction-level evidence from the US housing market," Applied Economics, Taylor & Francis Journals, vol. 51(26), pages 2818-2841, June.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:26:p:2818-2841
    DOI: 10.1080/00036846.2018.1558361
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    Cited by:

    1. David Rey-Blanco & Pelayo Arbués & Fernando A. López & Antonio Páez, 2024. "Using machine learning to identify spatial market segments. A reproducible study of major Spanish markets," Environment and Planning B, , vol. 51(1), pages 89-108, January.
    2. Jamie Bologna Pavlik & Yang Zhou, 2023. "Are historic districts a backdoor for segregation? Yes and no," Contemporary Economic Policy, Western Economic Association International, vol. 41(3), pages 415-434, July.
    3. Pham, Dai Van, 2024. "The effects of superstition on firms' investment behavior: Evidence from Vietnam, an irreligious country✰," Journal of Comparative Economics, Elsevier, vol. 52(1), pages 1-27.
    4. Tao Chen & Andreas Karathanasopoulos & Stanley Iat-Meng Ko & Chia Chun Lo, 2020. "Lucky lots and unlucky investors," Review of Quantitative Finance and Accounting, Springer, vol. 54(2), pages 735-751, February.

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