Monthly Archives: March 2012

The role of emotions in buying a McMansion

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“Financial journalist and author” Jean Chatzky discusses her rules about money and hints that buying a McMansion and working with money in general is complicated by emotions:

Have money rules changed with the recession?

I don’t know that the money rules have changed, but I think the recession has made people realize the importance of some of the money rules. For example, Money Rule #26 is “Just because someone will lend it to you, doesn’t mean you should borrow it.” I think it’s the lesson of the housing crisis. We over-borrowed. We took out bigger mortgages than we could truly afford because the banks were willing to give it to us. Every unfurnished McMansion proves that point. For everybody who’s ever felt house-poor or student-loan poor or credit-card poor, the recession has hammered that home.

Why do people tend to overcomplicate money?

It’s really emotional. If I had a bottle of champagne and I opened it with a group of friends, there would be this feeling that we should divvy it up fairly. But if I said, “I have some extra money,” people start making value judgments. There’s morality involved with how we divvy up the money.

Combined with that is the fact that we’re not taught about money as kids or in the schools. There’s not room for it in the curriculum. Getting financial literacy into every school in the country is a very important thing to do, but it’s an uphill battle. The combination of those two things makes many of us feel insecure when it comes to making the right decisions about our money, whether we’re spending it, saving it, or investing it.

Her rules seem meant to limit the emotional side of money. If you have rules to follow, you can sidestep the emotional aspects. While the rules may be helpful, this is a good reminder that economic activity is often emotional. We often talk as if humans make decisions purely for economic reasons when the real story is much more complicated. Stock trading and investing in stocks, purchasing consumer goods, and saving money are laden with emotions.

So what emotions lead to purchasing a McMansion? I haven’t seen an academic study that addresses this. However, critics of McMansions have made a number of arguments about why people buy McMansions: they want to impress other people, they have little sense of style or design, they have money to burn, they don’t realize they can get by with less space, they are unaware of how others might negatively view their home, and they are obsessed with getting a deal without thinking about quality. Critics generally argue that McMansions are attempts at displaying a particular status to others and this causes the buyer to overlook some concerns to which they should pay attention.

I’m guessing that McMansion purchasers wouldn’t give the reasons that critics suggest. At the same time, purchasing a home, usually the biggest purchase of someone’s life, is full of emotions. Buying a dwelling is one thing but when you add up a mortgage plus the idealization of a home in the American Dream and it becomes much more than that.

US government (and “statistical bureaucracy”) looking to measure well-being

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The federal government is looking into ways to measure well-being as a new indicator of social life:

Funded by the U.S. Department of Health and Human Services, a panel of experts in psychology and economics, including Nobel laureate Daniel Kahneman, began convening in December to try to define reliable measures of “subjective well-being.” If successful, these could become official statistics.

But as the United States ventures into the squishy realm of feelings, statisticians will first have to define happiness and then how to measure it. Neither is a trivial matter. There is even some doubt whether people, when polled, can accurately say whether they are happy…

The panel, organized by the nonprofit National Academies, has already met with two of the key figures in the U.S. statistical bureaucracy: Robert Groves, the director of the U.S. Census Bureau, and Steve Landefeld, the director of the Bureau of Economic Analysis, the federal agency that puts out the gross domestic product figures.

According to proponents, a measure of happiness could help assess the success or failure of a range of government policies. It could gauge the virtues of a health benefit or establish whether education has more value than simply higher incomes. It might also detect extremes of inequality or imbalances in how people divide their time between work and leisure.

I’m not sure why there is opposition to this. There are plenty of social scientists who study this topic and have developed established measures of “happiness.” I’ve written on this topic a number of times looking at the effect of income on happiness, how religion leads to greater life satisfaction through interaction with others, and an argument that we need to study flourishing rather than happiness. As I’ve noted before, measuring happiness requires looking at both short- and long-term satisfaction. This panel may have to work on applying these measures onto a national scale but they are not creating a whole new field of study.

The cost issue may be driven more by the current budget troubles than anything else. If you are studying the effectiveness of programs and policies, why not include a measure of well-being? We tend to measure many things in terms of economics and pragmatic factors alone. Overall, it could make government statistics more holistic. A measure of well-being doesn’t have to be the only number that matters in the future but it can play an important role.

Three other thoughts:

1. The panel might consider avoiding the term “happiness” as this seems too subjective to a lot of people. In popular usage, the emotion is considered to be ephemeral. Instead, stick with well-being or life satisfaction.

2. Tying this panel to the idea of the “pursuit of happiness” in the Declaration of Independence seems silly. This doesn’t provide evidence for or against this sort of panel.

3. I’m very amused at the mention of a “statistical bureaucracy.” This might be the worst nightmare for some people: statistics plus government. Just a reminder: one member of the bureaucracy, Robert Graves at the Census Bureau, is a sociologist with a lot of experience with surveys.

 

Lost in the Trayvon Martin story: the mindset behind gated communities

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Lost in the Trayvon Martin story is the location where this all occurred: a gated community. While these are common in some places, particularly in Florida, one author explains the unique mindset in gated communities and how this might have contributed to the situation:

From 2007 to 2009, I traveled 27,000 miles, living in predominantly white gated communities across this country to research a book. I threw myself into these communities with gusto — no Howard Johnson or Motel 6 for me. I borrowed or rented residents’ homes. From the red-rock canyons of southern Utah to the Waffle-House-pocked exurbs of north Georgia, I lived in gated communities as a black man, with a youthful style and face, to interview and observe residents.

The perverse, pervasive real-estate speak I heard in these communities champions a bunker mentality. Residents often expressed a fear of crime that was exaggerated beyond the actual criminal threat, as documented by their police department’s statistics. Since you can say “gated community” only so many times, developers hatched an array of Orwellian euphemisms to appease residents’ anxieties: “master-planned community,” “landscaped resort community,” “secluded intimate neighborhood.”

No matter the label, the product is the same: self-contained, conservative and overzealous in its demands for “safety.” Gated communities churn a vicious cycle by attracting like-minded residents who seek shelter from outsiders and whose physical seclusion then worsens paranoid groupthink against outsiders. These bunker communities remind me of those Matryoshka wooden dolls.  A similar-object-within-a-similar-object serves as shelter; from community to subdivision to house, each unit relies on staggered forms of security and comfort, including town authorities, zoning practices, private security systems and personal firearms.

Residents’ palpable satisfaction with their communities’ virtue and their evident readiness to trumpet alarm at any given “threat” create a peculiar atmosphere — an unholy alliance of smugness and insecurity. In this us-versus-them mental landscape, them refers to new immigrants, blacks, young people, renters, non-property-owners and people perceived to be poor.

This account lines up with academic research on the topic: gated communities are intended to be safe places. They are generally in the suburbs and residents move there to feel more secure. While not stated explicitly, these communities are meant to help keep issues like poverty, race, social class, and crime outside the walls and fences.

Here are the three best works I know on the subject:

1. McKenzie, Evan. 1994. Privatopia: Homeowner Associations and the Rise of Residential Private Government. New Haven, CT: Yale University Press.  

2. Blakely, Edward and Mary Gail Snyder. 1999. Fortress America: Gated Communities in the United States. Washington, D.C.: Brookings Institution.

3. Low, Setha M. 2003. Behind the Gates: Life, Security, and the Pursuit of Happiness in Fortress America. New York: Routledge.

One of the ironies revealed in these works is that these gated communities are rarely completely sealed off from the outside world. The ones that are tend to be the province of the wealthy and have very controlled entry points. For many gated communities, while there might be fences or walls, not all communities have manned gates and there are often multiple entrances into a neighborhood. So the gated nature of the community is more about a feeling of security than an actual sense that no unwanted outsider can get in.

In the end, gated communities do not necessarily lead to more violent action against outsiders. At the same time, the mindset in these communities is explicitly about safety and protection from the outside world.

Economist Robert Shiller: “we will never in our lifetime see a rebound in these [housing] prices in the suburbs”

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Economist Robert Shiller suggests there is a “real chance” we may have a long way to go before the US housing market recovers:

Many young people are choosing to live at home for a longer period of time instead of buying. Moreover, would-be homebuyers are settling into modern apartments and condominiums, further hindering a housing rally. Shiller says the shift toward renting and city living could mean “that we will never in our lifetime see a rebound in these prices in the suburbs.”

A perpetually sluggish housing market, which Shiller believes has become “more and more political,” might push the country in a “Japan-like slump that will go on for years and years.”

I imagine there are a lot of people who hope Shiller is very wrong. If you watch the full video here, Shiller also suggests there is a chance for a rebound. The discussion is based on this data:

Home prices in January were flat compared to the prior month, suggesting stabilization in the market, but home values fell for the fifth-straight month and prices dropped to their lowest levels since 2003, according to the Standard & Poor’s/Case-Shiller Home Price Index. Housing prices declined 3.8 percent on a year-over-year basis. The index measures the value of home prices in 20 U.S. metropolitan cities.

The key prediction here is that suburban housing prices may not rebound for decades. What are the implications of this? I wonder if this means that we may finally witness a suburban growth plateau, meaning that because people will have more difficulty moving in and out of their houses, suburban growth will have to slow. Of course, this may change after a few years as people adjust to their mortgages and either move out of being underwater or pay enough off to make some money when they sell. But there would still be fewer people looking for homes, leading to less demand for new homes.

 

Atheists rally but still have a long way to go in the field of public opinion

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Atheists may have held the “Reason Rally” last Saturday in Washington D.C. but data suggests they have a long way to go in countering negative public perceptions:

Atheists remain an enigma for many people. In fact, a study released last year found that religious people distrust atheists almost as much as rapists (National Post):

Researchers at the University of British Columbia and the University of Oregon conducted a series of studies that found a deep level of distrust toward those who don’t believe in God, deeming them to be among the least trusted people in the world — despite their growing ranks to an estimated half billion globally. “There’s this persistent belief that people behave better if they feel like God is watching them,” said Will Gervais, lead study author and doctoral candidate in the social psychology department at UBC. “So if you’re playing by those rules, you’re going to see other people’s religious beliefs as signals of how trustworthy they might be.” … “It’s pretty shocking that we get the same magnitude of distrust towards atheists simply because they don’t believe [in God],” said the researcher, who is himself an atheist. “With rapists, they’re distrusted because they rape people. Atheists are viewed as sort of a moral wild card.”…

So, one rally didn’t change perceptions too much … that’s not hard to believe. Gregory Paul, an independent researcher in sociology and evolution, and Phil Zuckerman, a professor of sociology, are puzzled by the dislike of atheists, but they see some positive signs for the nonbelievers’ future:

More than 2,000 years ago, whoever wrote Psalm 14 claimed that atheists were foolish and corrupt, incapable of doing any good. These put-downs have had sticking power. Negative stereotypes of atheists are alive and well. Yet like all stereotypes, they aren’t true — and perhaps they tell us more about those who harbor them than those who are maligned by them. … As with other national minority groups, atheism is enjoying rapid growth. Despite the bigotry, the number of American nontheists has tripled as a proportion of the general population since the 1960s. Younger generations’ tolerance for the endless disputes of religion is waning fast. Surveys designed to overcome the understandable reluctance to admit atheism have found that as many as 60 million Americans — a fifth of the population — are not believers. Our nonreligious compatriots should be accorded the same respect as other minorities.

It looks like there will be plenty of material to study in this area in the coming years.

I’d be interested to hear Paul and Zuckerman’s argument about surveys being titled toward religiosity. Do questions about religion suggest that the socially desirable answer is to be religious or does this pressure come mainly outside the survey? What questions produce higher results?

Three bold aspects of Emanuel’s $7 billion infrastructure plan for Chicago

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A proposal for a $7 billion infrastructure plan in Chicago during a tough financial time for many municipalities catches the attention of the New York Times:

“There is tremendous interest in doing something different — people aren’t waiting for the federal government to raise the gasoline tax or pass the carbon tax and have money raining down,” [Robert Puentes of the Brookings Institution] said. He cited successful campaigns in “can-do states” that include Colorado, Washington, Arizona and Virginia to finance economic development projects with public-private partnerships, and Los Angeles’ vote in support of a major transportation referendum in 2008…

In the speech, to be delivered at the Chicagoland Laborers’ Training and Apprentice Center, Mr. Emanuel will describe the financing for the sprawling plan. Some of it will come from the newly created Chicago Infrastructure Trust, an initiative announced this month by Mayor Emanuel and former President Bill Clinton, who has long had an interest in infrastructure and energy efficiency. The fund, a nonprofit corporation, pools outside investment and applies it to a wide range of possible projects.

Other funds will come from cost cutting, some from the savings in energy and water use from retrofitting buildings, and some from user fees, but “none of these funds will come from an increase in property or sales taxes,” according to the speech. A copy was provided to The New York Times through the mayor’s office. Depending on the project, some of the investment would be paid back through interest on loans, others through profit sharing.

Still, economic development efforts in the past have tended to disappoint, Mr. Puentes noted, because they tended to pay businesses to relocate or threw money into projects like stadiums. Some public-private partnership projects have been criticized as giveaways to the private businesses that take them over — including two prominent cases in Chicago itself, the privatized Chicago Skyway and the city’s parking meter system, which obligate the city to leases that span generations. Mr. Emanuel says that the city has learned an important lesson, and that “I am not leasing anything,” or selling off the city’s assets, he said in an interview. “I’m using private capital to improve a public entity that stays public.”

This sounds bold on several levels:

1. The high cost of the project. Chicago has some large budget issues (a projected deficit of $635 million for 2012) as do some other local taxing bodies like the Chicago Public Schools who have a projected $700 million shortfall for next year. The cost itself, however funded, will be a difficult sell to some.

2. Infrastructure itself can be difficult to sell to the public. However, this is a growing issue for many cities that are working with decades-old infrastructure yet wanting to be part of the 21st century. At some point, these problems will have to be fixed and a good case can be made that cities (and the country) should be more proactive rather than waiting for bigger issues to arise.

3. I think the key here is the idea of a public-private partnership to fund infrastructure. Can this truly work on a large scale? Will the public believe that they won’t end up being on the hook if the private funding doesn’t work out? Can the process be fairly transparent and not done in the shadows? This idea is a big part of Emanuel’s plans for Chicago; a recent plan for Chicago’s business future was heavily dependent on the World Business Chicago group. As I’ve suggested before, if Emanuel can leverage the business community in areas like successful infrastructure improvements, he will likely get a lot of accolades.

Reminder in Willowbrook mosque case: IL municipalities have zoning jurisdiction 1.5 miles beyond boundaries

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As the Willowbrook mosque situation continues, the Village of Willowbrook clarified an important detail regarding Illinois municipalities and zoning:

Village consultant Jo Ellen Charlton said the village has decided to release a zoning map showing its area of influence for planning purposes after receiving questions from MECCA about whether it had the right to express its opposition.

A dotted line forming a box along 91st Street, just past the proposed location, is now shown on the map to indicate the village’s intention to exert influence over planning decisions in the area. Because the proposed location lies within 1.5 miles of a Willowbrook boundary line, it is considered within the village’s “planning jurisdiction,” officials said.

Even though the proposed site for the mosque is outside the boundaries of Willowbrook, Illinois law gives incorporated municipalities zoning control over land within 1.5 miles of their boundaries. This control was confirmed by a 1956 Illinois Supreme Court decision in favor of Naperville’s subdivision control ordinance, which said developers had to follow certain guidelines for streets and other subdivision features, extending to the 1.5 mile zoning boundary land. If two communities both could control the same land within the 1.5 mile boundary, either the two communities had to reach an agreement or the control would be set at a line in the middle of the two community’s actual boundaries. Land outside any community’s zoning boundaries is then controlled by the county.

This law has led to some interesting circumstances. For example, the suburb of Warrenville finally incorporated in the 1960s after many attempts because Naperville was expanding and would soon be able to control land around and possibly in Warrenville. At least several DuPage County suburbs have grabbed extra land through annexations in order to extend their zoning boundaries and therefore control land uses, particularly looking to avoid undesirable land uses.

This reminds me of a larger point: while zoning may seem arcane to the average citizen, it is a key tool communities can use and they (officials and residents) will fight hard to utilize these powers rather than let other people decide what “their land” will be used for.

 

Reflections on reasons some people hold out against smartphones

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I found this overview of reasons why some people haven’t yet adopted smartphones to be quite interesting having been one of “those people” up until a few months ago. Here are the five reasons given for why some people haven’t made the switch:

  • Fear of addiction. “I don’t want to end up falling victim to the smartphone, where I dive in and get lost for hours at a time,” dumbphone owner 24-year-old Jim Harig, 24 told The Times‘ Teddy Wayne.
  • The benefits of disconnectivity. “I also fear my own susceptibility to an e-mail-checking addiction,” writes Wayne. “The pressure to always be in communication with people is overwhelming,”  Erica Koltenuk tells the Journal‘s Sue Shellenbarger.
  • Cost. “These die-hards say they are reducing waste and like sidestepping costly service contracts,” writes Shellenbarger.
  • Durability. “I want a phone that you could drop-kick into a lake and go get it and still be able to make a call,” says Patrick Crowley, who bought a new phone 5 years ago.
  • Anti-consumerism. “[David] Blumenthal sees no need to ‘keep running out and buying new things if you can patch them and they hold together,'” explains the Journal.

Until this past December, I would have argued for the first three reasons. Here are my experiences of these three reasons in the four months I have had a smartphone:

1. Fear of addiction. I didn’t want to be a person who pulls out their phone at every dull moment. I don’t think I do this today but the phone is undeniably handy in several situations. Since I love learning and information, it is invaluable to be able to look things up. Also, in moments that where I would have been waiting already, say the barber shop or in line, I can quickly look things up and use my time well (what a rationalization…). Third, a smartphone is indispensable while traveling whether one needs a map, restaurant reviews, airline info, and more. I would say that addiction is hard to combat though.

2. Disconnectivity. I like the occasional experience of being disconnected. In fact, I think it is necessary to disconnect occasionally from all electronic/digital media. Here is my personal measure of addiction: if I can still enjoy a longer period of time (a few hours to a few days) without feeling a consistent need to check my phone, I’m in good shape. The smartphone should be a tool, not my life. The phone can enhance my interaction with others but it can also be a hindrance and I want to be mindful of this. Additionally, I have refused to connect my phone to my work email and I don’t want any apps that would allow me to do work through my phone.

3. Cost. I’m still irritated about this issue but there are cheaper options than the contract carriers. My wife and I got phones from Virgin Mobile and while it is not perfect, it is cheaper than any of the contract options. Perhaps this is simply the price of living in the modern world and considering that these phones are like little computers, it is a worthwhile investment.

All in all, the smartphone world is a nice one even if I have lost the “pride” mentioned in this article of being someone who can still hold out against the powerful forces of technology and consumerism. But I can still be part of the camp that relishes not having an iPhone…

In response to criticism, sociologist argues academics need to explain better what they do

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A recent Washington Post op-ed suggested college faculty do not work hard enough:

An executive who works a 40-hour week for 50 weeks puts in a minimum of 2,000 hours yearly. But faculty members teaching 12 to 15 hours per week for 30 weeks spend only 360 to 450 hours per year in the classroom. Even in the unlikely event that they devote an equal amount of time to grading and class preparation, their workload is still only 36 to 45 percent of that of non-academic professionals. Yet they receive the same compensation.

If the higher education community were to adjust its schedules and semester structure so that teaching faculty clocked a 40-hour week (roughly 20 hours of class time and equal time spent on grading, preparation and related duties) for 11 months, the enhanced efficiency could be the equivalent of a dramatic budget increase. Many colleges would not need tuition raises or adjustments to public budget priorities in the near future. The vacancies created by attrition would be filled by the existing faculty’s expanded teaching loads — from 12 to 15 hours a week to 20, and from 30 weeks to 48; increasing teachers’ overall classroom impact by 113 percent to 167 percent.

Critics may argue that teaching faculty members require long hours for preparation, grading and advising. Therefore they would have us believe that despite teaching only 12 to 15 hours a week, their workloads do approximate those of other upper-middle-class professionals. While time outside of class can vary substantially by discipline and by the academic cycle (for instance, more papers and tests to grade at the end of a semester), the notion that faculty in teaching institutions work a 40-hour week is a myth. And whatever the weekly hours may be, there is still the 30-week academic year, which leaves almost 22 weeks for vacation or additional employment.

One article about the subsequent conversation regarding the op-ed quotes sociologist Jerry Jacobs talking about how academics do not explain their jobs to the public well:

Faculty-baiting might exist because people have certain perceptions of how college professors operate, some experts said. “I do not think we do a good job of explaining what we do,” said Jerry Jacobs, a professor of sociology at the University of Pennsylvania. Jacobs, who has researched faculty life, said that students often graduate from research universities without a clear understanding of what a professor’s job entails. “Meanwhile people see that the costs of college are going up and to them, faculty at colleges don’t seem to work 40 hours a week like high school teachers do,” he said.

In a 2004 article in the Sociological Forum, Jacobs found that full-time faculty members spend an average of just above 50 hours a week working. The data for his analysis came from the 1998 National Study of Postsecondary Faculty by the U.S. Department of Education and the faculty sample included 819 colleges and universities. “As a point of comparison, the average work week for men in the U. S. labor force is 43 hours per week and 37 for women. About one-quarter of men work in the labor force work over 50 hours per week (26.5 percent), along with one in ten women (11.3 percent),” Jacobs said. Many academics, of course, report working far more than 50 hours a week — and for adjuncts, the pay is a fraction of the figures cited by Levy, and many work without health or retirement benefits, or any job security.

It may be a job with some more flexibility than other jobs but there is certainly plenty of work for academics invested in their classrooms, research, and schools.

So what would Jacobs say academics should do? How can we explain to the public what academic life is like?

One option is to tie our roles to helping prepare students for jobs. However, this downplays aspects that aren’t as clearly vocational.

Another option: be more clear with students about what we do and how we do it. Instead of making our jobs like “black boxes” that are mysterious and capricious, explain what we are doing as we go along. Why should our students learn about a particular topic? Why do we grade the way we do? What do we do when we put together a research paper? I’ve tried some of these strategies and while students don’t seem overjoyed, some do appear to appreciate hearing the process behind it.

A third option would be to more clearly relate our teaching and research to everyday life, whether this is in the classroom or the community. While public sociology might be a sort of trendy term, it could help show people why what we do matters. We don’t just sit around and write for ten other academics; in our research we are hoping to draw attention to particular issues, influence public policy, help people who care about the topics, and interact with others who are also interested.

Fourth, we could defend the classroom experience. It is not easy to effectively impart knowledge and wisdom to other and to lead discussions. These days, it might be cheaper to do more online learning but something is missing, the community and atmosphere that can come from being in a classroom where both the instructor and students are engaged. This sort of criticism also is often leveled at teachers: “anyone could teach these lessons.” I don’t think everyone could.