The Capitalization of Geomantic Attributes: Evidence from the Housing Market in Guangzhou

This study examines empirically the impacts of geomantic attributes on housing prices in Guangzhou. Using second-hand housing transaction data from one Guangzhou’s largest second-hand transaction agency, we construct a hedonic price model to analyze the determinants of housing purchase behavior. We find that unfavorable geomantic attributes, such as proximity to graveyard, funeral parlor, hospital, slaughterhouse, and highway, have significant negative effects on housing prices. However, favorable geomantic attribute close to the Pearl River has a significant positive impact on housing prices. Lucky floor numbers and lucky address numbers are also found to be capitalized into housing prices. Moreover, we find that the demand for housing improvement as housing purchase motivation is an important channel to determine which of geomantic attributes are unfavorable when residents have higher living requirements.