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 |
|---|---|
| Journal | Review of Finance |
| Volume | 25 |
| Issue number | 3 |
| Pages (from-to) | 903-935 |
| Number of pages | 33 |
| ISSN | 1572-3097 |
| DOIs | |
| Publication status | Published - May 2021 |
Keywords
- Fire sales
- Negative spillovers
- Haunted houses