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PaperclipPerfector  1yr ago (text post)   30067 thread views

Culture War Roundup for the week of November 13, 2023

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According to one survey, two-thirds of people in the US believe that the law of supply and demand does not apply to housing.

This seems perfectly compatible, indeed supportive, of my thesis that people have false factual beliefs about the housing market.

Yes, that's why I posted it.

According to one survey, two-thirds of people in the US believe that the law of supply and demand does not apply to housing.

Or perhaps they're correctly noticing that the places with the most supply are often the places with the highest prices.

That isn't how the survey was worded.

Imagine that {State} passes a law to ensure that suburban homes may be developed on farmland and open space near cities. The new law overrides local zoning restrictions. It causes a building boom. In five years, the number of homes and apartments in your metropolitan region is 10 % larger than it otherwise would have been. For example, a region that would have had 1,000,000 residential units in five years without any change to development restrictions will instead have 1,100,000 units. This is three times the rate of housing growth in the nation as a whole.

How would this affect the market value of typical {Home Type} in {City}? It would...

  • substantially increase their market value
  • somewhat increase their market value
  • have no effect on their market value
  • somewhat decrease their market value
  • substantially decrease their market value

Literally 60 to 70 percent of respondents chose "substantially increase", "somewhat increase", or "have no effect on".

I don't see how that addresses what I said.

People recognize that large, booming cities have high housing prices despite huge amounts of stock, so of course they'll respond to such a poll with that in mind. The median respondent isn't analyzing this question in the way economists or even just people on a rationalist forum would. They don't assume "ceteris paribus" the way it's become second nature for economists and generally educated people. They don't recognize what the question is "getting at".

They read that poll question and call upon their general knowledge of what they know happens to housing prices when a city is booming. And they're right insofar as housing prices in booming cities increase more than housing prices in non-booming cities. That the poll has difficulty herding them into the thought experiment the poll wishes to herd them into does not mean they're imbeciles who don't think supply and demand is a thing, for housing or otherwise.

That the poll has difficulty herding them into the thought experiment the poll wishes to herd them into does not mean they're imbeciles who don't think supply and demand is a thing, for housing or otherwise.

More questions from the same survey:

Imagine that a new high-school program for training students to be plumbers causes a large increase in the number of plumbers in a city. Would wages for other residential plumbers in the city increase, decrease, or stay the same?

A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Do free trade agreements make the price of products sold in the U.S. higher, lower or not make a difference?

For each of these questions, there was a 50/50 split between "lower" (correct) and "higher or no difference" (incorrect). I have no qualms with calling these respondents "imbeciles who don't think supply and demand is a thing".

I concede!

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