SUPERSTITIOUS BELIEFS AND CONSPICUOUS CONSUMPTION IN LANDED HOUSING MARKET IN SINGAPORE

Abstract

Superstitious beliefs influence many types of people’s decisions such as selecting event dates, phone number and investment. This study aims to investigate impact of Chinese superstitious behaviour on Singapore’s landed housing market. Conspicuous spending behaviour will also be explored because it may influence consumer’s decision to purchase real estate with the intention to signal and highlight their wealth and social status. Using a sample of 42,979 sale transactions of landed properties in Singapore from 1995 to 2018, this study conducted regression models to empirically test the relationship between “lucky” and “unlucky” address numbers and prices of landed housing. The findings suggest that buyers are willing to pay a premium of 1.00% for “lucky” address number and a discount of 1.40% for “unlucky” address number. Buyers may have been influenced by superstitious beliefs when choosing and purchasing properties. Additionally, it was found that the transaction volume during the Hungry Ghost Months fluctuates over the years, and is not consistently lower than other months as initially expected. Therefore, the superstitious event does not necessarily negatively impact the transaction volume. Given that superstitious behaviour influences decision-making of people, the findings in this study will be useful for stakeholders in the real estate market, such as buyers, sellers and developers, to make informed decisions and obtain profitable outcomes. Our results also could not rule out the influence of conspicuous spending in landed housing purchase. More research can be done to find evidence on conspicuous spending behaviour in the landed housing market in Singapore.