Spillovers in Prices: The Curious Case of Haunted Houses

Utpal Bhattacharya, Daisy Huang*, Kasper Meisner Nielsen

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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 languageEnglish
JournalReview of Finance
Volume25
Issue number3
Pages (from-to)903-935
Number of pages33
ISSN1572-3097
DOIs
Publication statusPublished - 2021

Keywords

  • Fire sales
  • Negative spillovers
  • Haunted houses

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