Superstitions and stock trading: some new evidence

Abstract

We examine the potential effect of superstitious beliefs on stock trading in four Asian- Pacific countries with deep Chinese cultural heritage (China, Hong Kong, Singapore, and Taiwan). We focus on market responses to days that are superstitiously deemed in the Chinese cultural as either lucky or unlucky. Our regression results from daily data over 2 January 1991 to 30 December 2011 suggest that unlucky days (particularly day 4 and Friday the 13th) generally exhibit higher stock returns. However, our results remain generally consistent with market efficiency since a trading rule based on this numbering pattern fails to produce any significant abnormal profits after taking into account transaction costs.