Speculating on Superstition: Evidence from Housing Transactions in Hungry Ghost Months in Singapore

Abstract

This paper aims to study the behavior of superstitious and non-superstitious investors surrounding the superstition that buying or selling during the Hungry Ghost month (typically August) will be inauspicious. We find that superstitious Chinese homebuyers pay 1.41% lower on average per square meter price for houses bought in the Hungry Ghost month than houses bought outside the Hungry Ghost month. We find that older Chinese, aged above 40 years who are more likely to be superstitious, pay a lower price relative to younger Chinese. On the other hand, the younger Chinese investors, who are more likely to be non-superstitious, speculate on the Hungry Ghost effects and buy cheaper. However, their investment strategies of timing buy-and-sale activities around the Hungry Ghost month do not yield significant abnormal returns.