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Spillovers in Asset Prices: The Curious Case of Haunted Houses

  • 2018.12.07
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Speaker: Prof. Utpal Bhattacharya (Hong Kong University of Science and Technology)

Topic:

 Spillovers in Asset Prices: The Curious Case of Haunted Houses

 

Time&Date: 

  1:00-2:15 pm, 2018/12/14 (Friday)

Venue:

  Room 619 , Teaching Building A

Speaker:

Prof. Utpal Bhattacharya (Hong Kong University of Science and Technology)

Abstract: Exploiting the unique institutional setting of Hong Kong’s real estate market, we uncover a curious ripple effect of haunted houses on the prices of nearby houses. Prices drop on average 19% for units that become haunted, 9% for units on the same floor, 6% for units in the same block, and 1% for units in the same estate. Our study makes two contributions. First, we provide an estimate of a large negative spillover on asset prices caused by an idiosyncratic quality shock. Second, we find that the demand shock rather than the supply shock explains most of the spillover.