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.
| Original language | English |
|---|---|
| Pages (from-to) | 903-935 |
| Number of pages | 33 |
| Journal | Review of Finance |
| Volume | 25 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 1 May 2021 |
Bibliographical note
Publisher Copyright:© The Author(s) 2020. Published by Oxford University Press on behalf of the European Finance Association. All rights reserved.
Keywords
- Fire sales
- Haunted houses
- Negative spillovers
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