HAUNTED HOUSES are not for the faint of heart. Deceased former tenants—normally those who have suffered violent, untimely deaths—are said to remain in residence. Living occupants complain of creaking doors and floorboards, shifting furniture, knocking, footsteps and voices. Ghostly apparitions can terrorise children; pets flee eerie spectres.

Sceptics might write such phenomena off as paranoia, but haunted houses do spook the property market. That ghosts depress prices, especially in some Asian cities such as Hong Kong, has long been recognised. But a recent working paper by Utpal Bhattacharya and Kasper Meisner Nielsen of the Hong Kong University of Science and Technology, and Daisy Huang of Nanjing Audit University, attempts to calculate the size of the ectoplasmic discount. It estimates that Hong Kong properties that become haunted, owing to the death of a former inhabitant from an accident, murder or suicide, lose on average a fifth of their value. The price of these “hongza”, or haunted flats, can remain depressed for years.

Using a database of more than 1.1m residential real-estate transactions, combined with data from four commercial haunted-house websites (see for example Squarefoot), the authors identify 898 haunted properties that changed hands between between 2000 and 2015. After controlling for size and age, long-term price trends and seasonal fluctuations in demand, they find that haunted flats decline in price by an average of 20%. The authors observe a clear “ripple effect” in the local market. Neighbouring properties fall by 5%; those in the same block drop by 3%; and those in the same estate 1% (see chart).

So ghosts and ghouls are a factor for discerning Hong Kong house-hunters to weigh. But the process by which a property becomes haunted matters, too. Suicides (which account for nearly three-quarters of hauntings in the territory) lower the value of affected properties by between 16% and 28%, depending on the method used; deadly accidents depress prices by 20%. Murders, meanwhile, have the most chilling effect on values, sending prices tumbling by a whopping 36%. Shrewd buyers who ignore the gruesome history of their prospective purchase may find its value goes bump in the night.