The Effect of Superstition on Housing Prices

Examining the effect of superstition on housing prices in not new in academic literature. A recent presentation by Fortin et al. at the American Economic Association looked at the price effects of superstitious beliefs on house street numbers ending with the digits 4 and 8 in Chinese communities in Greater Vancouver area. In Chinese culture, the number “8” is auspicious, while the number “4” is considered unlucky. This tetraphobia comes from the fact that the pronunciation of the word for four (四: sì) is very similar to the word for death (死: sǐ) in Mandarin, Cantonese, and several Chinese dialects. On the other hand, the word for eight (八: bā) is phonetically similar to the word for prosperity or wealth (发: fā).

As the author notes, ethnic Chinese made up about 18 percent of the total population of Greater Vancouver in 2001, however there are 22 census tracts in Vancouver and its suburb of Richmond where the percentage of ethnic Chinese residents exceeded 50 percent of the population. In Chinese, Richmond translates as the “City of Rich Gate” since “mond” has the same pronunciation as “gate” in Chinese. The authors find that in neighborhoods where the percentage of Chinese residents exceeds the Greater Vancouver average of 18 percent, houses with street numbers ending in “4” are sold at a 2.2 percent discount and those ending in “8” are sold with a 2.5 percent premium in comparison to houses with street numbers ending in any other digits. With a mean nominal house price of about CAD$400,000 over the sample period, this translates to a $8,000 discount for houses with street number ending with “4” and a $10,000 premium for houses ending with a digit “8” in neighborhoods with higher than average Chinese population in Greater Vancouver.

Source: Nicole M. Fortin, Andrew Hill and Jeff Huang. 2010. Superstition in the Housing Market. 46th Annual AREUEA Conference Paper