Via Andrew Sullivan … The Frontal Cortex : Buying the Wrong House
The post reports on a study that argues people overweight rare events (e.g. visitors to home) and underweight common ones (like commuting) and so buy larger houses farther away than they should.
The key paragraph from the original paper:
“Recently, one of us read a newspaper article that documented an interesting
example of what we may call a “weighting error�. When buying a house, one trade-off
people have to make is between the size of the house and the length of the daily commute
to work. Most people (note that the example comes from a Dutch newspaper) work in
city centers. As city centers are expensive, a preference for a short commute by necessity
means one is forced to buy a small house or apartment. Large houses are affordable, but
only for those who are willing to live in the countryside and to face a long commute. It
seems that many people think about this trade-off, and many eventually choose the large
house. After all, a third bathroom is very important for when grandma and grandpa come
over for Christmas, whereas driving two hours each day is really not that bad. Anecdotal
evidence has it that a lot of these people come to regret their choice. A third bathroom is
a completely superfluous asset for at least 362 or 363 days each year, whereas a long
commute does become a burden after a while. Recent evidence (Stutzer & Frey, 2007)
shows that people with longer commuting time report systematically lower subjective
well-being. ”