Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/222310
Title: ARE CHINESE BUYERS INFLUENCED BY THEIR ZODIACS? - EVIDENCE FROM PRIVATE HOUSING TRANSACTIONS IN SINGAPORE
Authors: PHANG WEI JUN
Keywords: chinese buyers
superstition
feng shui
pseudoscience
2019-2020 RE
Real Estate
RE
Sing Tien Foo
Issue Date: 22-May-2020
Citation: PHANG WEI JUN (2020-05-22). ARE CHINESE BUYERS INFLUENCED BY THEIR ZODIACS? - EVIDENCE FROM PRIVATE HOUSING TRANSACTIONS IN SINGAPORE. ScholarBank@NUS Repository.
Abstract: In the world full of diverse cultures, we are constantly exposed and influenced by superstitious beliefs; Feng Shui is among one of them. These beliefs may or may not be extensively widespread; but Feng Shui, in particular, has garnered prevalence in almost every Chinese community all around the world. Although the Feng Shui concepts are regarded as pseudoscientific, these ideals are still being practiced by many individuals who believe that by doing so, it would improve one’s health and prosperity. That being said, this paper does not intend to debunk if Feng Shui concepts are true or false in nature, but rather, it aims to seek understanding of the influence of Feng Shui concepts on transaction activities in the residential real estate market in Singapore. We investigate if cognitive bias induced by Feng Shui related superstitions will affect an individual’s propensity to pay more for their property; and whether the effect is heterogeneous according to gender, race and age. This paper uses information from residential transactions during the years 2000 – 2010, and the dataset includes critical information, such as personal demographic information that allow us to accurately determine the zodiacs of every buyer. After which, we classified these homebuyers into two treatment groups that illustrate either a favourable or an unfavourable relationship with the zodiac years in which transactions occur. There are two main regression models in the paper: the first tests for percentage premiums representing the willingness to pay by the treatment group (superstitious groups) over the control group; and the second tests for the likelihood of overpaying above the market value by the superstitious group. In our results, we find that the homebuyers were not concerned with unfavourable or favourable relationships with specific zodiacs years, but rather the existence of a relationship, which justifies a premium for the property. We also find that males tend to react aggressively to the relationship with these specific zodiac years, as they are more likely to overpay above market value for their property and exhibit higher levels of risk-taking behaviour. Interestingly, we found no substantial relationship between race and age, although it is intuitive to associate the concepts of Feng Shui to the Chinese people, given its Chinese origins, and older people as being more superstitious than younger people given that superstitious beliefs are usually taken more seriously by older people.
URI: https://scholarbank.nus.edu.sg/handle/10635/222310
Appears in Collections:Bachelor's Theses

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