The influence of cultural factors on price clustering: Evidence from Asia–Pacific stock markets

Brown, Philip H.; Chua, Angeline; Mitchell, Jason

doi:10.1016/s0927-538x(02)00049-5

Cited by 94 publications

(69 citation statements)

References 27 publications

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“…Large values of S are evidence against the null hypothesis (Cox and Hinkley, 1974 The finding of price clustering at 0 and 5 is consistent with previous research (e.g. Osborne, 1962;Niederhoffer, 1965Niederhoffer, , 1966Harris, 1991;Brown et al, 2002). The results also support the marketing research by Heeler and Nguyen (2001), who find that not only digits 0 and 5 are overrepresented in Asia but also digit 8 is significantly over-represented in pricing commodities.…”

Section: Empirical Results: Price Clusteringsupporting

confidence: 90%

“…Mitchell, 2001;Brown et al ., 2002;Sonnemans, 2006), only a brief review is offered here. The basic arguments underpinning clustering can be categorized into five groupings: process of number development, behavioural explanations, rational economic reasons, market collusion reasons and cultural reasons.…”

Section: Cultural Explanations Of Price Clustering and Resistancementioning

confidence: 99%

“…For the Asian stock markets where there is a significant Chinese community, Brown et al (2002) and He and Wu (2006) find an additional set of results for clustering and resistance for specific numbers (4 and 8) that are of were more common than prices ending in odd multiples of 5 cents; prices were more likely to end in even cents than odd cents, and least likely to end in fractional cents; and whole dollars occurred more frequently than half dollars, which were more frequent than price multiples of 10 cents. They also find that price clustering increased with a stock's price level and decreased with trading volume.…”

Section: Introductionmentioning

confidence: 99%

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Influence of cultural factors on price clustering and price resistance in China's stock markets

Cai

Keasey

2007

Accounting & Finance

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This paper builds on prior research by analysing the impact of cultural factors on both price clustering and price resistance in China's stock markets. The results support the presence of cultural factors impacting on price clustering with the digit 8 showing a higher propensity for clustering and the digits 4 and 7 showing a lower propensity in the A-share market, where stock is denominated in renminbi and traded by mainland Chinese. These results are further supported by an analysis of the B-share market, where cultural factors have no (or less) impact on the price of Chinese stocks traded by foreign investors in US dollars (or in Hong Kong dollars). A range of measures for price resistance show the digits 0 and 5 to be significant resistance points in the A-share market. Although digit 8 cannot be considered as a resistance point, its resistance level is highest among the remaining numbers. In conclusion, cultural factors help to explain not only price clustering in the Chinese stock markets but price resistance levels as well, albeit at a weak level. Copyright (c) The Authors Journal compilation (c) 2007 AFAANZ.

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Section: Empirical Results: Price Clusteringsupporting

confidence: 90%

Section: Cultural Explanations Of Price Clustering and Resistancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Influence of cultural factors on price clustering and price resistance in China's stock markets

Cai

Keasey

2007

Accounting & Finance

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“…This suggests that many of the research results from other markets may not necessarily hold true for China. Brown, Chua, and Mitchell (2002) find some evidence that Chinese culture influences the number preferences of traders in Hong Kong Special Administrative Region and that this preference was accentuated over periods of auspicious Chinese festival holidays.…”

Section: Introductionmentioning

confidence: 97%

Seasonalities in China's Stock Markets: Cultural or Structural?

Mitchell

Ong²

2006

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.In this paper, we examine returns in the Chinese A and B stock markets for evidence of calendar anomalies. We find that both cultural and structural (segmentation) factors play an important role in influencing the pricing of both A-and B-shares in China. There is some evidence of a February turn-of-the-year effect, partly owing to the timing of the Chinese Lunar New Year (CNY); and the holiday effect around the CNY period is stronger and more persistent compared with the other public holidays. The segmentation between the two markets is apparent in the day-of-the-week effect, where B stock markets tend to post significant negative returns on Tuesdays, corresponding with overnight developments in the United States, while significant negative returns are observed on Mondays in the A stock markets. Investment strategies based on some of these calendar anomalies, and allowing for transaction costs, suggest that the A stock markets tend to offer more economically significant returns. JEL Classification Numbers: G11, G12, G14, G15

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“…In housing markets, houses with a number ending in eight are traded at a premium, whereas houses with a number ending in four are traded at a discount (Bourassa & Peng, 1999;Chau, Ma & Ho, 2001;Agarwal, He, Liu, Png, Sing & Wong, 2014;Fortin, Hill & Huang, 2014;Shum, Sun & Ye, 2014). In financial markets, culture-inspired number prefer-ences cause particular limit-order and transaction prices to be more frequent than other ones (Brown, Chua & Mitchell, 2002;He & Wu, 2006;Cai, Cai & Keasey, 2007;Brown & Mitchell, 2008;Bhattacharya, Kuo, Lin & Zhao, 2016). Moreover, the shares of newly listed firms with lucky listing codes seem to be overvalued and underperform those with unlucky listing codes (Hirshleifer, Jian & Zhang, 2014).…”

Section: Introductionmentioning

confidence: 99%

Number Preferences in Lotteries

et al. 2015

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We explore people's preferences for numbers in large proprietary data sets from two different lottery games. We find that choice is far from uniform, and exhibits some familiar and some new tendencies and biases. Players favor personally meaningful and situationally available numbers, and are attracted towards numbers in the center of the choice form. Frequent players avoid winning numbers from recent draws, whereas infrequent players chase these. Combinations of numbers are formed with an eye for aesthetics, and players tend to spread their numbers relatively evenly across the possible range.

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The influence of cultural factors on price clustering: Evidence from Asia–Pacific stock markets

Cited by 94 publications

References 27 publications

Influence of cultural factors on price clustering and price resistance in China's stock markets

Influence of cultural factors on price clustering and price resistance in China's stock markets

Seasonalities in China's Stock Markets: Cultural or Structural?

Number Preferences in Lotteries

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