Neuroscience
The basis for many superstitious beliefs may be little more than fantasy but their economic effects are all too real. According to Travis Ng and colleagues at the Chinese University of Hong Kong, casual estimates suggest that between $800 and $900 million is wiped off the value of US businesses every Friday the Thirteenth! Now Ng's team has explored the economic cost of superstition by comparing the value of Hong Kong car number plates purchased through auction from 1997 to 2009.
The new research focuses particularly on the presence of 4s and 8s in Hong Kong plates. There's a consensus in Hong Kong that '8', which rhymes in Cantonese with 'prosper' or 'prosperity', is a lucky number, whereas '4', which rhymes with 'die' or 'death', is an unlucky number.
Controlling for visual factors that affect price (for example, plates with fewer digits are more sought-after) Ng's team found that an ordinary 4-digit plate with one extra lucky '8' was sold 63.5 per cent higher on average. An extra unlucky '4' by contrast diminished the average 4-digit plate value by 11 per cent. These effects aren't trivial. Replacing the '7' in a standard 4-digit plate with an '8' would boost its value by roughly $400.
As well charting the monetary value of superstitious beliefs, Ng's study was also able to record how the economic influence of superstition varies according to ongoing macroeconomic circumstances. For instance, the presence of a '4' in a plate always drops its value, but during bad economic times, the diminution in value is greater. On a day that the stock market had dropped by 1 per cent, the 'cost' of having a '4' in a standard 4-digit plate was increased by 19.9 per cent. 'A "4" is bad,' the researchers wrote, 'but it is even worse in bad times.'
Curiously, the effect of ongoing market conditions on the impact of 4s and 8s wasn't equal. Changes to the stock market index exaggerated the 'cost' associated with an extra '4' on both 3-digit and 4-digit plates, but it only affected the premium associated with having an extra lucky '8' on 3-digit plates. 'We are not able to come up with a good explanation for the asymmetric effects,' the researchers said.
'We have shown that the value of superstitions can be economically significant,' the researchers concluded. 'We have also shown that some results are consistent with the view that people tend to be more superstitious in bad times.'
_________________________________
Ng, T., Chong, T., & Du, X. (2010). The value of superstitions. Journal of Economic Psychology, 31 (3), 293-309 DOI: 10.1016/j.joep.2009.12.002
Post written by Christian Jarrett (@psych_writer) for the BPS Research Digest.
- Gender Differences In Superstition - Men Are Influenced By Good Omens, Women By The Unlucky
Imagine taking a seat for a university exam and seeing that your seat number is unlucky. Would it bother you? A new study by Maria De Paola and her colleagues explored this question in a field study with over 700 Italian students. Sixty-one of the students...
- Extras
Eye-catching studies that didn't make the final cut: People look younger when they smile. Narcissism comes in three different flavours - vulnerable, grandiose and aggressive. We eat more when different food types are presented on a plate separately,...
- Mindless Eating: The Food Decisions We Don’t Realise We’re Making
How many food-related decisions do you think you make every day? When Brian Wansink and Jeffery Sobal of Cornell University asked 139 participants this question, the average answer was 14 decisions. But then the participants were asked to break a typical...
- Exploring The Physiological Effects Of Thinking Positively
Whereas countless studies have examined the effect of negative psychological states on levels of cortisol – a corticosteroid hormone that is associated with stress and ill-health – few, if any, have looked at the effect of positive psychological states...
- 080808 (god Is A Number Part 1)
In Chinese numerology, the number eight is associated with prosperity. It's such a lucky number1 (as everyone knows by now), that the Opening Ceremony of the 2008 Olympics in Beijing will begin at 8:08PM on 08/08/08. In My Mascot Only Gave Me Sex...
Neuroscience
Lucky number plates go up in value when times are bad
The new research focuses particularly on the presence of 4s and 8s in Hong Kong plates. There's a consensus in Hong Kong that '8', which rhymes in Cantonese with 'prosper' or 'prosperity', is a lucky number, whereas '4', which rhymes with 'die' or 'death', is an unlucky number.
Controlling for visual factors that affect price (for example, plates with fewer digits are more sought-after) Ng's team found that an ordinary 4-digit plate with one extra lucky '8' was sold 63.5 per cent higher on average. An extra unlucky '4' by contrast diminished the average 4-digit plate value by 11 per cent. These effects aren't trivial. Replacing the '7' in a standard 4-digit plate with an '8' would boost its value by roughly $400.
As well charting the monetary value of superstitious beliefs, Ng's study was also able to record how the economic influence of superstition varies according to ongoing macroeconomic circumstances. For instance, the presence of a '4' in a plate always drops its value, but during bad economic times, the diminution in value is greater. On a day that the stock market had dropped by 1 per cent, the 'cost' of having a '4' in a standard 4-digit plate was increased by 19.9 per cent. 'A "4" is bad,' the researchers wrote, 'but it is even worse in bad times.'
Curiously, the effect of ongoing market conditions on the impact of 4s and 8s wasn't equal. Changes to the stock market index exaggerated the 'cost' associated with an extra '4' on both 3-digit and 4-digit plates, but it only affected the premium associated with having an extra lucky '8' on 3-digit plates. 'We are not able to come up with a good explanation for the asymmetric effects,' the researchers said.
'We have shown that the value of superstitions can be economically significant,' the researchers concluded. 'We have also shown that some results are consistent with the view that people tend to be more superstitious in bad times.'
_________________________________
Ng, T., Chong, T., & Du, X. (2010). The value of superstitions. Journal of Economic Psychology, 31 (3), 293-309 DOI: 10.1016/j.joep.2009.12.002Post written by Christian Jarrett (@psych_writer) for the BPS Research Digest.
- Gender Differences In Superstition - Men Are Influenced By Good Omens, Women By The Unlucky
Imagine taking a seat for a university exam and seeing that your seat number is unlucky. Would it bother you? A new study by Maria De Paola and her colleagues explored this question in a field study with over 700 Italian students. Sixty-one of the students...
- Extras
Eye-catching studies that didn't make the final cut: People look younger when they smile. Narcissism comes in three different flavours - vulnerable, grandiose and aggressive. We eat more when different food types are presented on a plate separately,...
- Mindless Eating: The Food Decisions We Don’t Realise We’re Making
How many food-related decisions do you think you make every day? When Brian Wansink and Jeffery Sobal of Cornell University asked 139 participants this question, the average answer was 14 decisions. But then the participants were asked to break a typical...
- Exploring The Physiological Effects Of Thinking Positively
Whereas countless studies have examined the effect of negative psychological states on levels of cortisol – a corticosteroid hormone that is associated with stress and ill-health – few, if any, have looked at the effect of positive psychological states...
- 080808 (god Is A Number Part 1)
In Chinese numerology, the number eight is associated with prosperity. It's such a lucky number1 (as everyone knows by now), that the Opening Ceremony of the 2008 Olympics in Beijing will begin at 8:08PM on 08/08/08. In My Mascot Only Gave Me Sex...