Spillovers in Prices: The Curious Case of Haunted Houses

Utpal Bhattacharya; Daisy Huang; Kasper Meisner Nielsen

doi:10.1093/rof/rfaa030

Spillovers in Prices: The Curious Case of Haunted Houses

Utpal Bhattacharya, Daisy Huang^*, Kasper Meisner Nielsen

^*Corresponding author af dette arbejde

Institut for Finansiering

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › peer review

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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.

Originalsprog	Engelsk
Tidsskrift	Review of Finance
Vol/bind	25
Udgave nummer	3
Sider (fra-til)	903-935
Antal sider	33
ISSN	1572-3097
DOI	https://doi.org/10.1093/rof/rfaa030
Status	Udgivet - maj 2021

Emneord

Fire sales
Negative spillovers
Haunted houses

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abstract = "Exploiting the unique institutional setting of Hong Kong{\textquoteright}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.",

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author = "Utpal Bhattacharya and Daisy Huang and {Meisner Nielsen}, Kasper",

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AB - 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.

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KW - Negative spillovers

KW - Haunted houses

KW - Fire sales

KW - Negative spillovers

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