Do discounts mitigate numerological superstitions? Evidence from the Russian real estate market

Abstract

AbstractIn this paper I investigate the impact of numerological superstitions and discounts’ effect on the buyers’ behavior in the apartment market using actual sales data. Based on the dataset from Moscow primary real estate market, which includes 40 buildings, we test the apartments buyers’ demand on lucky 7thfloor and unlucky 13thfloor in comparison to neighboring floors and its response to developers’ discount policy for the apartments on the 13thfloor. Results of the random-effects model for the preference towards 7thfloor show that that “good luck” effect is present at the 90% confidence interval. Results of the mixed-effects model for the preference towards the 13thfloor’s apartments show that in case of discount moderation, the “bad luck” effect of the 13thfloor is mitigated, while in case of “no discount” buildings we find the clear negative effect of the 13thfloor.