Rational Home Buying

by Scott Alexander6 min read27th Aug 2011138 comments

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Practical
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My parents are considering moving house. I've had a front-seat window to their decision process as they compare alternatives, and sometimes it isn't pretty.

A new house is one of the most important purchases most people will make. Because of the sums involved, the usual pitfalls of decision-making gain new importance, and it becomes especially important to make sure you're thinking rationally. Research in a couple of fields, most importantly positive psychology, offers some potentially helpful tips.

LOCATION, LOCATION, LOCATION

People so consistently under-count the pain of commuting when making choices that the problem has its own name: Commuter's Paradox. The paradox is that, although rational choice theory predicts people should balance commuting against other goods and costs, so that one person might have a longer commute but a nicer (or cheaper) house and so be just as happy overall, this doesn't happen: people who have long commutes are miserable, full stop. A separate survey by Kahneman and Krueger found that commuting was the least enjoyable of nineteen daily activities mentioned, and other studies have found relations between long commutes and poor social lives, poor health, high stress, and various other problems.

Psychologists aren't entirely sure why people so consistently under-count the pain of commuting. Maybe it's because it's viewed as "in-between" time rather than as an activity on its own; maybe it's because it comes in relatively short and individually bearable chunks repeated over many years, instead of as a single entity. In any case, unless you are mentally atypical you will probably have a tendency to undercount commute time when buying a new home, and may want to adjust for that tendency.

HOUSES COST A LOT OF MONEY

One of Kahneman and Tversky's famous bias experiments went like this: imagine you're buying a new shirt. It costs $40 at a nearby store, and it costs $20 at a store that's fifteen minutes away. Do you drive the fifteen minutes to save twenty bucks? Most people would.

Now imagine you're buying a new TV which costs $2020 at a nearby store, and $2000 at a store that's fifteen minutes away. Do you drive the fifteen minutes to save twenty bucks? Most people wouldn't.

In both cases, the tradeoff is the same - drive fifteen minutes to save twenty bucks - but people were much more willing to do it for the cheap item, because $20 was a higher percentage of its total cost. With the $2000 TV, the $20 vanishes into the total cost like a drop in the ocean and seems insignificant.

Nice homes can cost $500,000, $1,000,000, or even more. There doesn't seem to be a big difference in price between $710,000 and $745,000 houses; perhaps if the second home looked even a little nicer in an undefinable way you might be prepared to take it. But $35,000 is $35,000; if those minor advantages don't provide $35,000 worth of value, when measured on the same scale on which you measure the value of of movie tickets, shoes, and college funds, then you should buy the first house and keep the cash.

I find purchasing decisions easier when I think about them like this: which would you rather have, the second house, or the first house plus a two-week luxury vacation to anywhere in the world every summer for the next five years? The second house, or the first house plus a brand new Lexus? The second house and dining at home every week, or the first house and eating out at your favorite restaurant every weekend for the rest of your life? (EDIT: gjm points out that it's easier to resell houses than other types of good, so if you expect to resell your house you should really only be considering the extra money involved in the mortgage)

DON'T OVERCOUNT EASILY AVAILABLE DETAILS

The availability heuristic says that people overcount scenarios that are easy and vivid to imagine, and undercount scenarios that don't involve any readily available examples or mental images. For example, most people will assert, when asked, that there are more English words ending with "-ing" than with "-g". A moment's thought reveals this to be impossible - words ending in "-ing" are a subset of those ending in "-g" - but thinking specifically of "-ing" words makes it easier to bring examples to mind.

The real estate version of this fallacy involves exciting opportunities that you will rarely or never use. For example, a house with a pool may bring to mind the opportunity to hold pool parties. But most such plans will probably fall victim to akrasia, and even if they don't, how often can one person throw pool parties without exhausting their friends' interest? Pool parties may be fun to imagine, but they'll probably only affect a few hours every couple of months. Other factors, like the commuting distance and whether your children end up in a nice school, may affect several hours every day.

(a classic example here is the "extra bedroom for Grandma" - visits from Grandma are easy to imagine, but if she only comes a couple of days a year, spending tens of thousands more dollars for a house with an extra bedroom and bathroom for her is probably pretty stupid. You'd save money - and make her happier - by putting her up in the local five star hotel.)

LIGHT AND NATURE

Good illumination and a view of natural beauty aren't just pleasant luxuries, but can make important practical differences in your life.

Light, especially daylight, has a strong effect on mood. There are at least fifteen controlled studies showing that bright light reduces symptoms of seasonal and nonseasonal depression by about 10-20% over placebo. This is about equal benefit to some antidepressant drugs, and sufficient that light therapy is a recognized medical treatment for depression. Bright light leads to self-reported better mood even in subjects without a diagnosis of depression, and also leads to better sleep and more agreeable social interactions.

Light and nature have positive effects on health. Some of the most compelling data comes from hospitals, which have long realized that their patients near windows do better than their more interior counterparts. In one study, surgical patients near windows recovered faster (7.9 vs. 8.7 days), received fewer negative comments from nurses (1.1 vs. 4 notes), and needed fewer strong painkillers (1 vs. 2.5 doses) than matched controls without a view. Other studies have compared recovery of physiological indicators of stress (for example, blood pressure) in subjects viewing natural or artificial scenes; the subjects with views of nature consistently have healthier stress reactions.

Nature may have special benefits for children. Experiments with subjects of all ages and levels of mental health have shown nature increases mental functioning and concentration, but some of the most cited work has been in children with Attention Deficit Hyperactivity Disorder. Children who live in greener settings also (independently of wealth) do better on schoolwork and show greater ability to delay gratification. Large studies find with high certainty that students who take standardized tests in better lighting do up to 25% better than their literally dimmer schoolmates, and progress through lessons 15-25% faster.

You don't have to live in the Amazon to get a benefit: even children in a concrete building with a tiny "green island" boasting a single tree did better than their peers in a building without such an island.

BETTER FIRST IN A VILLAGE THAN SECOND IN ROME

Brains generally encode variables not as absolute values but as differences from an appropriate reference frame. That means that to really appreciate your wealth, you've got to be surrounded by people who are poorer than you are.

This seems to be empirically the case: a US study found the happiest Americans were rich people living in poor counties. However, this was true only of rich people living in rich neighborhoods of poor counties. As the study puts it, "individuals in fact are happier when they live among the poor, as long as the poor do not live too close".

Of course, this doesn't mean that you should move to Somalia for eternal bliss. There are community-wide benefits to living in a wealthy neighborhood, like better schools, and you may be better able to socialize with people from a similar class background as yourself. But given the choice between a neighborhood at the top of your price range and one at the bottom, you may find yourself more satisfied living in an area where it's the Joneses who have to try to keep up with you.

DON'T OVERSHOP AND DON'T OVERTHINK

It's easy to confuse "rationality" with a tendency to turn all decision-making over to conscious general-purpose reasoning, and in turn to assume that whoever ruminates about a decision the most is most rational. But there are at least two reasons to think that within reason it may be better to worry less over important decisions.

One is the finding that "comparison shopping" usually leads to less happiness in whatever you buy. Imagine being pretty sure you're going to buy House X until you look at House Y and find out that this one has a granite fireplace, and a pond in the backyard. It may be you don't like House Y at all - but now every time you go back to House X, you're thinking about how it doesn't have a granite fireplace or a pond, two features which you never would have even considered before. Whether you find this explanation plausible or not, the research generally agrees: too many choices result in less satisfaction with whatever you finally buy.

The second is the discovery that attempts to make your reasoning explicit and verbal usually result in worse choices. This includes that favorite of guidance counselors: to write out a list of the pros and cons of all your choices - but it covers any attempt to explain choices in words. In one study, subjects were asked to rate the taste of various jams; an experimental group was also asked to give reasons for their ratings. Ratings from the group that didn't need reasons correlated more closely with the ratings of professional jam experts (which is totally a thing) than those who gave justifications. A similar study found students choosing posters were more likely to still like the poster a month later if they weren't asked to justify their choice (Lehrer, How We Decide, p. 144).

The most plausible explanation is that having to verbalize your choices shifts your attention to features that are easy to explain in words (or perhaps which make good signaling value), and these are not necessarily the same features that are really important. In a telling experiment under the same protocol as the ones listed above, people asked to reflect upon their choices were more likely to choose the house with the extra room for Grandma than the house with the shorter commute times, because the extra reflection gave more opportunity for the availability heuristic to come into play.

CONCLUSION

Buying a house is one of the biggest decisions a family faces, and so has extra opportunity to be improved by rational thinking. Try to buy a house with good illumination and nearby green space in an area close to your workplace where you'll be relatively high on the social ladder. Carefully consider whether special features have genuine utility or are just highly available small details, and justify the relative differences in cost in absolute, not just relative terms. And, um, try to do all of this while following your gut instincts and not overshopping.

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In both cases, the tradeoff is the same - drive fifteen minutes to save twenty bucks - but people were much more willing to do it for the cheap item, because $20 was a higher percentage of its total cost. With the $2000 TV, the $20 vanishes into the total cost like a drop in the ocean and seems insignificant.

Evaluating cost savings as a percentage actually makes a certain amount of sense when evaluating policies rather than acts. Cheaper purchases tend to be much more frequent: you probably buy many more shirts than you do big-screen TVs, so expending the effort to find the cheapest source of shirts and evaluate whether it's worthwhile to go out of your way to buy them will save you several times $20 over the lifetime of the policy, whereas the TV is effectively a one-time decision which will only save you $20 total. True, the 15 minute drive time is per-purchase rather than per-policy, but 1) the cost is not just the drive time, but also the effort to research options and the cognitive load of picking and option, which are one-time costs, and 2) a general policy of thriftiness for small, frequent purchases can have a substantial effect on your overall financial situation, but i... (read more)

0minusdash6yOr maybe it's just outrageous to ask for $40 when it's clearly possible to sell it for $20. So you kind of punish the shop that asks for $40 because you see them as dishonest and morally repulsive. Sometimes you also have to pay attention to what behavior you encourage with your actions. Not only the immediate dollar value. Why don't Christmas tree sellers sell the last, leftover Christmas trees for much cheaper, right before Christmas? Because then lots of people would just wait until that time and then buy it cheap. If buyers know that the seller will rather throw out the goods to the thrash rather than sell them cheaper then they will just casually buy the tree knowing that the price is stable and it's all fair. Short-sighted optimization would tell the seller to just sell the leftovers cheaper rather than throw them away. Similarly, you may want to "send a message" to the $40 shop that you will rather drive a lot than participate in such an outrageous deal.
0Toni9y"...frequent purchases can have a substantial effect on your overall financial situation, but indulging in overpayment for convenience on the odd big one-time purchase is an affordable luxury." I'm not really sure if that explains the behavior as one could also argument that the "cognitive burden" of extra effort for everyday purchases is greater than putting it into those big one-timers.
3Maniakes9yI'm assuming that most everyday purchases are frequently repeated (e.g. you buy milk and eggs every week), so the cognitive costs of figuring out the best place to buy milk and eggs can be amortized out over many transactions.
0jbay7yThere's another good reason why savings in terms of percentages are reasonable to consider, beyond just absolute savings. You can travel fifteen minutes to the store where a shirt costs $20, and buy two of them. This makes it a much more complicated decision than saving $20 on a television. Televisions are something that most people don't need a lot of. Even if there was a half-price sale on televisions, you probably still wouldn't be tempted to buy two of them (unless you're really into giving televisions as gifts or you think you can turn a profit on e-bay). So with a half-price sale you'd probably just by one TV and smile as you save $1,010 off the sticker price. So for just $20 off of a $2,000 television, I really wouldn't expect anyone to be tempted into buying two sets. It's a very simple tradeoff, then: Would you prefer $20, or 15 minutes? (It's still probably worth travelling, unless you make more than $80 per hour...) Shirts, though, are the kind of thing you'd possibly buy twice as many of if the price were halved. Looking ahead to when the first shirt gets worn out, you'll have to replace it. This could cost you another $40, plus the duration of a second shopping trip, which is probably longer than 15 minutes in total. Meanwhile, if you spend fifteen minutes now and buy two shirts, the fifteen minute travel time will pay itself back in the long run and you'll save the $40 that the second shirt would have cost you. This logic can be extended: If you are looking ahead that far, and have enough disposable income to spend $80 on shirts, you can avoid the second shopping trip by buying two shirts at the closer, more expensive store. But now your 15 minutes are worth $40, not $20. And for that price you could buy four shirts at the cheaper store... Ultimately your decision to travel 15 minutes might come down to how much closet space you have for extra shirts, how much of a hurry you're in right now, and how much money you have access to. Basically, there a

I never thought to write a post about it, but I use similar criteria when looking for an apartment. It's easier to switch apartments than houses, but it's harder to modify an apartment. This means that many of the criteria for apartments are more specific. Here are some criteria I use that Yvain didn't mention:

  • East-facing windows. The sun rising in the morning is great at waking me up and forcing me to keep a normal sleep schedule. Without it I tend to go on a 26-28 hour day.
  • Noise level. If possible, try to talk to some tenants. Try to gauge their age and propensity to make noise. I love living in an apartment complex full of older people. It's so quiet.
  • Top floor. I can't stand people stomping above me. High-rises usually have better sound insulation, making this less of an issue.
  • At least a block or two away from major streets. Big streets have more horns honking and are popular routes for emergency vehicles.
  • Fast internet access. Often, only one ISP is available in an apartment complex.

This list has slowly grown as I've moved to different places and been plagued by different annoyances. My current place fulfills most of the criteria, although it's a little too close to a major street. Firetruck sirens are louder than most emergency vehicles; enough that they break my concentration if I'm not wearing headphones. On the other hand, the Internet connection is particularly fast: symmetrical 100Mbit.

0[anonymous]9yPlus, rooms with west-facing windows easily become way too warm for my taste in the afternoon.

Another failure of rationality is failing to understand the difference between investment goods and consumption goods. A $745,000 house may cost more to buy than a $710,000 house but you're also likely to be able to sell it for more as well. The "true" cost is not $35K, instead, it's a complex calculation of marginal mortgage payments, expected rise or fall of housing prices and cash flow considerations.

6brazil849yI agree 100%. When I was house hunting, the number one priority (besides living in a good school district) was to buy a house which would be easy to turn around and sell if necessary. If 95% of the houses in your town have 3+ bedrooms and 2+ bathrooms, you are arguably making a mistake if you save 5 or even 10 percent by buying a 2 bedroom house. Even if that's all you need. So the upshot is that people who want to be rational often need to factor in other peoples' preferences, whether rational or not. As Ambrose Bierce pointed out, fashion is the dictator whom the wise both ridicule and obey.
6brazzy9yIf the your number one priority in finding a house is being able to easily sell it, you probably should rent rather than buy.
1brazil849yWhy? In the right market, buying offers a lot of advantages over renting.
3gjm9yIs it also a failure of rationality when one doesn't notice that someone else has already [http://lesswrong.com/lw/7am/rational_home_buying/4pbs] made [http://lesswrong.com/lw/7am/rational_home_buying/4pby] all the points one's making? :-)
1brazil849yI would say yes in the sense that you can probably learn more by reading other peoples thoughts carefully than by jumping in to post your own thoughts. But what if your main goal is to prove to yourself and others how smart you are? Or to win approval from others by posting intelligent points? The best would be to do both reading and posting, I think. But like anything else, if you are pursuing multiple goals simultaneously, one can expect that sooner or later those goals are likely to come into conflict with eachother.

it costs $20 at a nearby store, and it costs $40 at a store that's fifteen minutes away ... which costs $2000 at a nearby store, and $2020 at a store that's fifteen minutes

Shouldn't these numbers be the other way around? I.e $40,$20 and $2020 and $2000? Why would you drive fifteen minutes to pay an extra $20?

2Scott Alexander9yThanks, fixed.

You don't have to live in the Amazon to get a benefit: even children in a concrete building with a tiny "green island" boasting a single tree did better than their peers in a building without such an island.

The citation seems to be missing for this one.

5Scott Alexander9ySorry about that: Faber Taylor, A., Kuo, F.E., & Sullivan, W.C. (2002). “Views of Nature and Self-Discipline: Evidence from Inner City Children [http://web.mac.com/wcsulliv/William_Sullivan/Publications_files/Taylor,%20Kuo,%20Sullivan%202002.pdf] .” Journal of Environmental Psychology, 22, 49-63. Added.
6gwern9yFascinating: EDIT: The earlier http://www.outdoorfoundation.org/pdf/CopingWithPoverty.pdf [http://www.outdoorfoundation.org/pdf/CopingWithPoverty.pdf] is also worth reading.

OMG!

I feel really good about myself and my wife, now.

Fifteen years ago, we bought a house with a yard in which we planted lots of greenery (check); not stretching our budget (check); no pool or other frippery (check); we left the construction to the oversight of others rather than obsessing over every fireplace and window (check); and it is in a middle-class neighborhood in an otherwise working-class village (check). The commute is not short, however (fail).

My life should be bliss!

Seriously, does rationality training include congratulating yourself for lack of certain biases? Thanks for the post!

9Viliam_Bur8yIf you never congratulate yourself for thinking correctly, but you sometimes punish yourself for thinking incorrectly, you are effectively conditioning yourself against thinking. Which would be a bad thing. (Something similar to this was mentioned at the Rationality Minicamp.)
3MartinB9yI specifically searched my last flat to be in a 10-20 min walking distance from the work location. Are there research results that compare the different modes of transportation? I would expect a sorting of (better) walking <= public transport <= driving yourself (worse). Or is the stress level the same for either? Also was there a result in regards to the minimum distance necessary to the job location? While working from home has its own benefits, I would expect a certain distance between job and home to be good. My daily walking also helped with getting in the mood and with shutting down my work-mind.
1[anonymous]8yI think it depends on how good public transport is and how much traffic there is where you live.

Possibly commutes are surprisingly wearing because, in addition to the obvious (time taken, polluted air), if I'm a fair sample, the shortest route to anger is a belief that things can and should be different. There you are, in a car on a road, and if there weren't so many people on it, you could just go. If my theory is correct, then commuting in traffic is significantly worse than commuting without much traffic. On the other hand, driving in traffic is more work even without an anger factor. I'm not sure how you'd distinguish the two.

There you are, in a car on a road, and if there weren't so many people on it, you could just go.

In another forum, I once saw someone complaining that their commute should take 10 minutes, but usually took 20 because of the traffic. Someone else pointed out to them that what they really had was a 20 minute commute that they were occasionally fortunate enough to do in 10.

6brazil849yWell probably also the feeling of being out of control which comes from being stuck in traffic adds to your stress levels and unhappiness.
4PhilGoetz9yIn my case, my commute provides me with a lot of anger, because I routinely am stuck in traffic for up to an hour because they have closed off the same section of road that they've been working on daily for THREE YEARS now. Most of the time, they close the road off and start the traffic jams several hours before starting work. And because 495 is deliberately designed to prevent there being any alternate routes anywhere between Rockville and Falls Church - all of the exits are planned so that it's impossible to get off the beltway, drive parallel to it, and get back on. (It's also impossible to get to the metro stations along 495; you can sometimes see them as you drive by, but would have to go many miles to get to them.) And where they do have side routes, from Braddock to Gallows, they sometimes do road construction on 495 AND on ALL 3 SIDE ROUTES simultaneously! These are roads they work on only a few days each year; yet somehow they will all be blocked on the same day, during morning rush hour. Really, I think someone in the Dept of Transportation is just evil.
5taryneast9y"Never attribute to malice that which is adequately explained by incompetence" :P
1rela9yI feel like this quote is probably intended to be a joke. But, I have to ask anyway: I always heard this quote as "never attribute... explained by ignorance," with the moral being that ignorance is repairable, but malice is a (presumably?) permanent character trait. Is incompetence supposed to be a repairable or a permanent trait, in this phrasing? /end randomness...
3taryneast9yInteresting question... I never thought of it in that way. I thought of it more along the lines of "don't think they're out to get you... they're much more likely to be just incompetent". Both malice and incompetence can be fixed... but I think the quote is more about how to perceive other people. I have a vague idea that "assuming ill intentions" is a bias in itself.
0Lumifer7yI am curious -- how would you go about fixing other people's maliciousness?
0taryneast7yThere was never ayn intention that you could fix other people's malice... The post that I replied to was implying that malice was a fixed trait that cannot be changed in any way, and that is not my understanding at all. A person can choose to become less malicious if they wish. But to your point (even though it diverges from the original intention). It is plausible you could attempt to fix somebody else's malice using some of the standard ideas: explain that other people have feelings too. Ask how they'd feel in the situation they're putting the other person. I'd ask them if they wanted to live in a world where it's ok for everyone was nasty to each other, and talk in general about "the social contract". I'd also point out the negative utility in doing something that makes many enemies and how it's quite difficult to get along in this world with more enemies than friends. ie I'd start by trying to trigger their empathy. If that fails - I'd work on their sense of fairness, then if that doesn't work, fall back to purely selfish utility reasons. Note - all of the above may still fail - but it may serve to persuade some. If I personally were trying to fix the maliciousness of an actual person that I cared about fixing - I'd also spend some time to go look up the psychology of maliciousness and strategies in persuading them otherwise.
0DysgraphicProgrammer7yThe quote is commonly called "Hanlon's razor [http://en.wikipedia.org/wiki/Hanlon's_razor]" (by analogy with Occam's Razor) It is usually interpreted as pointing out that the prior probability of incompetence is much, much higher than the prior probability of evil. So that with any given fuck-up, even if it seems obviously evil, is still more likely to be caused by incompetence. In this case, it is very unlikely that there is any person or persons in the DoT that is amused by PhilGoetz's frustration and rage. It is highly likely that, between unions, and construction companies, and highway patrol departments, and schedule slips and general inattention, there is systemic incompetence in the DoT industrial complex.
0Lumifer7yIt's also highly likely that things are organized the way they are organized because it benefits someone -- e.g. unions, and construction companies, etc. etc. -- and nobody cares about the convenience of the masses. "It's just good business" -- Lord Cutler Beckett.
0DysgraphicProgrammer7yBut that's exactly what I mean. The union, the construction company, all have a stake, but none of them evil. It could even be all good guys. Say the planners are all looking out for the little guy. But one is worried about construction noise, and another about worker safety, and another about secondary traffic effects in local neighborhoods and another about cost overruns. It's the n-dimensional, multiplayer tug of war that produced a fucked up result, not actual malice on anyone's part.
0Lumifer7yWhat do you mean, "evil"? They all have a stake and they all arrange the situation to benefit themselves. It's not malice, just, as noted, "good business".
1falenas1089yMaybe driving on a highway with enough traffic so the cars go 30 mph vs an empty road of speed limit 30 mph? (Or speed limit 20 so people actually go 30).

a neighborhood ... where you'll be relatively high on the social ladder.

That seems to be the reverse of what the research you cited indicates (rich people in rich neighbourhoors of poor counties in America are happy). Don't you want to be in a rich neighbourhood (so you're surrounded by nice things and reminders of your high status) in a poorer region (so you have something worse to compare against) of a rich country (for all the infrastructural benefits that brings)?

6Will_Newsome9yI wonder if college towns are ideal, e.g. somewhere nice in the Knowledge Corridor.
0MartinB9yGood for mental stimulation. And probably a nice hospital for later usage.
1Scott Alexander9yI've changed the word "neighborhood" to "area" here, but this was actually the point I was least certain about. A lot of the theory and some studies I see mentioned but can't find do tend to suggest neighborhood, but the Firebaugh study, which is the best I could find an abstract for says not neighborhood but region. I don't know to what degree that contradicts the earlier results, and since I can't even find full text for Firebaugh, I'm not sure whether it means anything more profound than "try to avoid a house in the middle of a loud dirty ghetto, because you wouldn't like that." I'm also wary of this whole area because of the controversy around the Easterlin Paradox [http://en.wikipedia.org/wiki/Easterlin_paradox]
0[anonymous]9yRationalists can probably to an extent choose not to suffer from envy (just because they're more likely to understand that the effect exists and is a bad thing), whereas they can't choose not to suffer from infrastructural detriments. That argues in favor of rich neighborhoods. (This is one of many examples where it's tempting to overestimate science because it's tempting to underestimate the number of different ways in which the question the science asks differs from the question you want to know the answer to.)

The second house, or the first house plus a brand new Lexus?

Houses keep their value better than Lexuses. (Lexi. Lexoi. Lexūs. Whatever.) Eventually, you (or your heir(s)) will presumably sell the house, and then you will get more for the second house. Buying the first house gets you more liquidity than buying the second; it doesn't get you any more wealth. (If the housing market is performing well, which it did once upon a time, it may get you rather more in the long run.)

7Vaniver9yThough, from an investment perspective, unless you believe the neighborhood you're going to live in will change for the better (more than the rest of the area), you're probably better putting that 35k into stocks. So, it's not 35k going down a black hole- but it might be $700 a year (presuming 4% returns on stocks and 2% returns on houses).
3gjm9ySure. (Though past performance is no guarantee of what happens in the future, etc.) And "would I pay $700/year for an extra bedroom?" might have a different answer from "would I trade a Lexus for an extra bedroom?".
2Scott Alexander9yMost of this assumes you're treating your house as a place to live and not as an investment. Because you'll probably be paying interest on a mortgage, it's usually not a smart idea to pay more than you need for a house - but I admit that the possibility of selling the house later is a major factor that alters a lot of these calculations.

Since a house is inevitably both a place to live and an investment, it would seem to be appropriate to treat it as both. (Unless doing so spoils your enjoyment of it as a place to live, or something. For what it's worth, I've always thought of houses both ways, have never noticed such a negative effect, and have always been happy with the results on both counts. But I've been pretty fortunate.)

[EDITED to add: I agree that the extra mortgage interest you'll pay is a genuine extra cost -- and that, not the $35k price difference or whatever, is what you should be weighing against whatever you're paying the extra for. How the two figures relate to one another depends a lot on the mortgage interest rate, how quickly you repay, etc.]

2MartinB9yMental accounting can really bite you here. It is easy to treat everything house related as an 'investment' without ever bothering to actually do the math.
6gjm9yI think what that argues against is having a single mental pigeonhole labelled "investment" and treating everything in that pigeonhole alike. But surely the right way to think about this is that many things you buy can later be sold for some non-negligible fraction of what you pay for them; goods for which that fraction is likely to be bigger than 1 and for which that's the only reason you buy them are pure investments, goods for which the fraction is tiny are pure non-investments, but lots of things are in between. Failing to do the math in any situation involving large amounts of money is asking for trouble.
2[anonymous]9yI think Yvain just meant that the house is not being bought for the sole purpose of selling it later to make a profit.
4gjm9yI agree, but that isn't sufficient to justify treating extra money spent on it as if it simply disappears into a black hole -- which Yvain did, which is why I commented on it.
0Scott Alexander9yGood point, I'll edit.
1brazil849yI agree, but I would add that in some situations, the difference might come into play very quickly. For example, if you there is economic turmoil; the housing market turns south; you get laid off from your job; and you need to sell the house very quickly. In that case, the money you saved by buying a 2-bedroom cottage in a neighborhood of 3-bedroom houses will be quickly lost when you discover that it's really hard to find a buyer.
2[anonymous]9yIf you don't have a sufficient emergency fund to weather lay offs without being forced to sell your house, you don't have enough money to buy a house, so this is a non-issue.
0brazil849yI think I probably disagree with you, but let me ask you this: Suppose that a man earning $150,000 per year wants to buy a house which will cost $450,000. He will put up $90,000 as a down payment and take out a mortgage for the rest. The monthly payment on his mortgage will be $3500 which he can make somewhat comfortably on his salary. First, how big should his "emergency fund" be? Second, assuming he is laid off and 6 months later finds a job 1000 miles away what should he do with the house?
5[anonymous]9yDepends on his assessment of how secure his job is, and of how long it would take him to get a new one in his same geographic location. Aside: I do not consider a $3,500 mortgage payment comfortable on $150,000 salary. I don't agree with the 3x salary multiplier. That's a recipe for being house-poor. (I'm not claiming you're wrong about anything in particular, just adding info to shed more light on my personal views here. A lot of finance varies based on individual risk tolerances, and I have no problem with someone else being more or less risk tolerant than I, as long as they understand the potential dangers and payoffs of their choices.) In what profession does this sort of thing occur? That would be terrible. I should be more thankful for the IT industry, I guess. My preferred answer to this question is to pre-empt and look at why someone bought a home in an area with such a poor economic outlook. But, given that they already made the mistake of long-term settlement behavior (home-buying) in a place where one manager's whim can force you to have to move a thousand miles, I agree with you that they should have something more saleable or rentable.
0brazil849yLet's suppose that he thinks that there is a 20% chance that he will be laid off in the next 10 years, and that if he does, there is a 85% chance he will find a new, similar job within a year in the same geographic area and a 15% chance that he will never find a new, similar job within the same geographic area. Why do you assume that the area has a poor economic outlook? It could just be that his industry is shrinking in that area and growing in another. Besides, it's difficult perhaps impossible to predict in advance which way the economy will go and how it will affect local housing markets. If you disagree with me, then you should be able to make a fortune by investing in real estate in areas where the market will be strong.
2[anonymous]9y85% chance within a year? Then I would prefer a combination of one year of emergency fund (to cover minimal livable expenditure, not normal job-having level of expenditure) along with some excess to pay for actual non-job-loss emergencies and the cost of selling one's home and relocating. To clarify: Poor relative to the individual in question, not overall. Overall economy in the area could be booming, but if jobs in your field don't exist in your geographic area, that's all I meant by poor economic outlook. Nothing I proposed requires predicting local housing markets, only one's own job outlook. I am highly confident in my own ability to assess this for myself, and so presume, perhaps wrongly, that others should be able to get reasonably good estimates of their own. The unpredictability of local housing markets that you mention is part of my justification for being more risk averse with respect to home-buying than you seem to be.
0brazil849yI don't understand this at all. Why do you need money to cover the cost of relocation if (by hypothesis) you have enough money " to weather lay offs without being forced to sell your house"? Well obviously jobs existed when our hypothetical guy bought his house. Ok, then please tell me the 3 areas where it will be easiest and hardest for a recently laid off IT worker to find a job 5 or 10 years from now. Well one of the ways I dealt with the risk was by shopping for a house which would be easy to sell in a down market.
1[anonymous]9yBecause you stipulated there was a 15% chance of having to move if, after a year, no job was found locally. Obviously one job did. It is not obvious that that job could be readily replaced. I can find one or two jobs in each of various "middle of nowhere" places right now, but that doesn't mean IT jobs exist in Eugene, Oregon to a similar extent to Washington DC. One has a poor IT job outlook relative to the other. Easiest (and I assume in the U.S.)? In no particular order, DC, NYC, Bay Area. This may turn out wrong in 5 or 10 years, but I would bet good money that they remain in the top 10 places to find IT work. Bay Area I'm least confident about, because a social network bubble pop could leave lots of IT unemployment in that area, the way the dot com bubble did. Hardest? Way too many to be a good question, would need to take a look at an already narrowed-down list of places a person is considering moving to.
0brazil849yNo, I said that there is a 15% chance that the man will never find an equivalent job locally. I think your position is that with a sufficiently large emergency fund, you will never ever have to sell your house and that you should not buy a house unless you have such a fund. So I don't understand why the fund needs to include money for selling the house. Again, I am confused. You said you were "confident." So I don't understand why you would hedge yourself by saying "This may turn out wrong in 5 or 10 years." What is the probability that in 5 or 10 years DC will turn out to be a lousy place to be looking for an IT job? Same question for NYC and the Bay Area. Well let me put it this way: What areas would it not be a mistake for an IT professional to buy a house in right now?
0[anonymous]9yYes, you said that, which I take to imply that he has to move, because he would be unable to afford his mortgage otherwise. What else did you mean by it, if not that? Well that's just silly. Nothing is 100% ("never ever"). That should be a given here at LW, shouldn't it? If we want to be closer to "never ever" having to move, we could stipulate having enough money spread over "safe" fixed-return bonds such that the interest on those bonds pays for the mortgage. But that's well beyond "emergency fund." As above, since nothing is 100%, I'm confused at your confusion. Of course any assessment of the future could turn out wrong. Of course I can still be confident in my assessment. How confident? Hmm... 75%? 85%? I'm not going to put the time in to assess & calculate better than that, since nothing of import actually rests on it -- I am not in the middle of re-evaluating my own job-and-financial-security scenario, with which I am quite comfortable. Side question: Why do the exact percentages I have for my scenario matter to this discussion? Why does it matter which areas are a mistake or not? What are you getting at? That you think this is too impossible to determine? You really think you can't compare place X and place Y and get a good gauge of where it's financially safer to live, and that it's just a waste of time? Or is there something else you're after?
0brazil849yI meant exactly what I said, nothing more and nothing less. Anyway, if you accept that there is a reasonable chance that a person might be forced to sell his house, then my original point about re-sale stands. And your claim that it's a "non-issue" is wrong. Then what exactly did you mean when you said that the re-sale issue I raised was a "non-issue"? You seemed to be saying that if you started with a big enough emergency fund, then there is essentially no chance that you will have to sell the house. Well in that case, it seems a bit presumptuous to assume that a person who has to move for his new job necessarily made a mistake by buying a house in an area with a bad economic outlook. Because they make it easy for me to demonstrate the problems with your position. You say that a person who is laid off and unable to find an equivalent job in his local area made a "mistake" by buying in an area with a "poor economic outlook." You seem to be "confident" that you can pick out the areas with good economic outlooks. And yet there is sizeable uncertainty in your own predictions. The bottom line is very simple: When you buy a house, the cautious and prudent thing to do is to give a lot of priority to the issue of re-saleability.
0[anonymous]9yThat the risk of having to sell can be reduced via location choice and emergency fund, such that one does not need to pay $X more for too-much-house just to re-sell it. I'm sure there are scenarios whereby the extra cost is worthwhile. Exceptions don't invalidate general rules or preferences, which is all I stated earlier. I concur on considering it, but apparently not to the extent you do. Not knowing all the particulars of your situation, I can't really say if I agree or disagree with your decision to pay more to have something easier to re-sell.
0brazil849ySeems to me that's very different from this:
1[anonymous]9yI don't see how. I'm glad your decision worked for you, though. Cheers.
0brazil849yWell do you agree that the second statement asserts that the risk of being in a situation where you have to sell your house is minuscule under certain circumstances?
0jhuffman9ySix months salary is usually given as a minimum for liquid assets. At $150k his take-home is maybe $7500-8500 depending on various with-holdings and insurance premiums. So $45K would be the low-end. Note this does not include assets in retirement accounts or other accounts where the funds cannot be withdrawn without a penalty.
0brazil849yAnd you agree that even with 45k in cash sitting around, there is a decent chance that our hypothetical home buyer might need to sell the house in a hurry?
0jhuffman9yHe would have a little more incentive but the costs of a house sitting vacant are pretty straightforward and anyone would have an incentive to avoid those. This could come about unexpectedly due to a lay-off but could come about for other unexpected reasons as well. It doesn't really matter if he's laid off or not, these facts remain: * You should have a reasonable cushion so that a temporary interruption in employment does not mean foreclosure and financial ruin * If you have to move, you want to sell or rent your house as soon as possible. Other things equal, buying with an eye towards the re-sell market is wise.
0brazil849yTo a large extent, I agree with both your points. The reason I was asking about the size of one's emergency fund is to demonstrate that for your typical person, you can't just rely on having an emergency fund to avoid the possibility of having to sell your house. The sensible (dare I say "rational"?) thing to do is to rely on both strategies, i.e. have extra financial resources AND try to buy a house which will be easy to sell if you need to.

For example, a house with a pool may bring to mind the opportunity to hold pool parties. But most such plans will probably fall victim to akrasia, and even if they don't, how often can one person throw pool parties without exhausting their friends' interest? Pool parties may be fun to imagine, but they'll probably only affect a few hours every couple of months.

I told my family exactly this when they wanted to get an above-ground pool. Sure enough... eventually it just got damaged enough that we threw it out.

6PhilGoetz9yWhen I lived on a lake near Boston, I went swimming or windsurfing almost every day. I have a friend with a pool who's had it for about 5 years now, and still uses it several days every week. And, if you have a big house and only throw a party every couple of months, you aren't a party person.

Another commuting study:

I analyze cross-sectional data from the American Time Use Survey (2003-2008) to quantify decreases in health-related activity participation due to commuting and labor time. I examine the data for associations between commute length and time spent in exercising, food preparation, eating, and sleeping behaviors. I augment the data with activity strenuousness scores to test whether physically-draining commutes induce lower-intensity activity substitutions. I find small but highly significant associations consistent with the conjectur

... (read more)
1gwern9yFrank discusses shorter commutes as a way to resolve the Easterlin paradox, arguing that rich countries could be happier, they just choose to buy the wrong things (bigger houses vs shorter commutes). The commute example employs a number of interesting citations about the health effects of driving: "How not to buy happiness" [http://www.amacad.org/publications/spring2004/frank.pdf].

I find purchasing decisions easier when I think about them like this: which would you rather have, the second house, or the first house plus a two-week luxury vacation

House is probably a poor example here, since it's generally paid over the length of a mortgage. $35,000 overall, divided by 12 payments per month, divided by say 20 years = $145/month. So would I rather $145/month, or the small amount of joy that the slightly nicer house will bring me in that same time frame? I could see that joy being the best deal for one's dollar. I've spent $200/month ... (read more)

4esmero9yLuxury vacations and cars can also be paid over a lengthy period of time, so it seemed appropriate. If you actually do have a strong preference for the more expensive house, then I agree you should get it if it's not gonna be too hard to pay. But I got the sense that he was talking about cases when you can't really decide between one deal or the other. In these cases, if you simply chose the cheapest because it's cheapest, rosy retrospection would kick in and you'd most likely have a good case of buyer's remorse. "Yes, this place is cheaper but the other one was so nice... surely I could have had afforded to pay 200 bucks a month for it..." However, if you think of your decision to buy the cheaper one as an opportunity to also buy something else you'd really like, it becomes easier to counter this tendency. "Sure, the other house was nicer but with the money I saved I could afford an amazing redecoration in this one."
0PhilGoetz9yEasy: The second house plus a two-week non-luxury vacation.

I smell a business opportunity; maybe a webapp? A sequence of good-enough homes by price range and location sorted by whatever reliable inputs can be discovered.

a classic example here is the "extra bedroom for Grandma" - visits from Grandma are easy to imagine, but if she only comes a couple of days a year, spending tens of thousands more dollars for a house with an extra bedroom and bathroom for her is probably pretty stupid. You'd save money - and make her happier - by putting her up in the local five star hotel.

I'm going to buy a house with a room for "grandma", and here's why: While it might cost me less to put guests in luxury hotels, it's going to cost me every time I have a guest over... (read more)

2CCC8yThere's also the fact that, if Grandma is in a luxury hotel, then there will be a certain amount of commuting back and forth between your house and the hotel for as long as Grandma is there. It might not seem like much, but an extra commute is quite an inconvenience - unless of course you happen to pick a house across the street from a luxury hotel...
2Jakeness8yWhy not purchase an air mattress or a pull-out couch?
2TheOtherDave8yThat's fair, but it's also worth considering whether the circuitry that causes unhappiness every time you put someone up in a hotel is something you can edit in the long run. For example, if each time "grandma" visits and you put her up in a hotel you make a point of rehearsing in your mind all the additional amenities a hotel can offer "grandma" (maid service, etc.), or if you set aside a "bucket" of money into which the extra mortgage payments you aren't making gets transferred every month and pay the hotel out of that slush fund (and maybe pay other costs of "grandmas" visit out of it as well, like paying for cabs rather than picking her up at the airport, or paying for fancy dinners for her, or whatever makes you and her happy), or whatever, you might discover after a year or two that you no longer feel that way. Or, then again, you might not.
[-][anonymous]9y 4

For example, most people will assert, when asked, that there are more English words ending with "-ing" than with "-g".

Is it possible that at least some of those people think (at least subconsciously) about words ending with the phoneme /g/ rather than the orthographic letter G? A famous experiment in which most people consistently skip “of” when counting the number of times the letter F occurs in a sentence (presumably because in “of” it stands for a /v/ sound) suggests to me that that might be not that unlikely.

4Alicorn9yI don't suppose they did the same test with "if" to check your hypothesis? Or "off", though that one might be harder to miss because it's longer?

Does the "paradox of choice" (too many choices result in less satisfaction) apply to big decision as well as small ones? (It could be that too many choices imposes a psychological cost that's independent of the value of the decision, while the material benefit of having more choices scales with the value.) I couldn't find a clear answer from Barry Schwartz's book, but the advice he gives in the last chapter:

To manage the problem of excessive choice, we must decide which choices in our lives really matter and focus our time and energy there, let

... (read more)
1Unnamed9yThere is evidence that it applies to big decisions too, although there's a tradeoff between satisfaction and success on objective criteria. One of the studies in that genre involved graduating college students choosing a job. The main independent variable was the personality variable of maximizing vs. satisfacing, rather than choice set size, but the results had a similar pattern. Maximizers tended to consider more possible jobs, get a job that was better on objective criteria like salary, and be less satisfied with their job. Iyengar, Sheena S., Rachel F. Elwork, and Barry Schwartz (2006), “Doing Better But Feeling Worse: Looking for the ‘Best’ Job Undermines Satisfaction,” Psychological Science, 17 (2), 143–50. pdf [http://www.columbia.edu/~ss957/articles/Doing_Better_Feeling_Worse.pdf]
0jknapka9ySo the best strategy would be to maximize, and then when you feel dissatisfied, remind yourself that this feeling is misplaced, since you've probably achieved a situation that is objectively better than the one you would have achieved via satisficing. Will that actually work to de-fuse the feeling of dissatisfaction, I wonder? (Personally, I am a habitual satisficer, and feel pretty happy about most things in my life, while recognizing that there are many ways I could have done better.)
2[anonymous]9yHere's a more viable strategy. Ask a friend to pick your house for you, maximizing to his/her heart's content, and narrowing it down to 2-3 choices for you to personally pick from. This negates any dissatisfaction you might feel about maximizing, because you didn't have to.
1TheOtherDave9yI (a habitual satisficer) have a similar arrangement with my husband (an occasional maximizer) about car purchases. He researches a bunch and picks a few possibilities, from which I choose.
0TabAtkins9yI have an identical arrangement with my wife. She does the research and narrows it down, I make the final choice so she doesn't have to deal with maximizing.

Great article.

In a telling experiment under the same protocol as the ones listed above, people asked to reflect upon their choices were more likely to choose the house with the extra room for Grandma than the house with the shorter commute times, because the extra reflection gave more opportunity for the availability heuristic to come into play.

I am curious about the part after "because". Did the experiment you're referring to actually distinguish that explanation (availability heuristic) from other possible ones (such as signalling value, gr... (read more)

0Scott Alexander9yI've only read a distillation of the experiments (which had the same "because" I used) but not the papers themselves. The distillation mentioned that the scientists conducted interviews with the participants (whatever that's worth) and that this was their interpretation of a broad category of results from several similar experiments. I don't know if there were actual efforts to exclude signaling etc. See Lehrer, How We Decide, Ch. 5 for more detail.

The linked articles on commutes are long and I'm not sure how to search for my specific question: what were the typical happiness-costs of, say, a half hour commute on a subway, vs a two hours commute in car vs a two hour commute on a train.

I used to commute 1.5 hours on a train to my job in NYC. It was definitely stressful - I had a hard time maintaining any social life. Now I have a half hour subway commute which is definitely better, but I wonder if it'd be worth the money to move a more expensive place closer to my job.

3rortian9yThe big difference between the two is that commuting is isolating whereas trains/subways put you around other human beings. Also, having to focus on other slow moving vehicles is mentally taxing with no obvious benefit. Being able to read, or sometimes nap, is liberating.
1sdenheyer9yIf you are commuting downtown during rush hour, being with other human beings is a downside - it's quite oppressive, actually. And you probably won't get a seat, which means napping is out, and reading is more of a hassle. I'm in somewhat of an ideal situation, commute-wise - I work just outside the city and live inside, so I commute in the opposite direction of traffic. But I've had to commute downtown occasionally and it's way more exhausting.
3scav9yFor me, what counts is the amount of free time I have left in a day between getting home and going to bed. A long commute really eats into that time. But when the commute time is quite short, it becomes much a much smaller proportion of my working day, and below a certain point, it's insignificant next to the hours I am working anyway. You might not find that shaving 10 minutes off your 30 minute commute makes enough difference to pay more for it. One of the best ways to cut out commute time is make an arrangement to work from home a few days a month, if your job allows for it.
3Raemon9yMore relevant is that if I want to go out, meet with friends, go to Less Wrong meetups, etc, on a weekday, I won't get home till rather late. I'd only be shaving 10 minutes off a "regular" commute, but I could get getting home half an hour earlier from certain things I attend regularly.
1essem9yIn New York a commute is basically inevitable, so I think it is important to choose happiness during the trip. Can you listen to books on tape? Can you meditate? Can you call your cousin in Seattle? Can you workout (for example, take the stairs, flex, kegel)? Can you get some sun and enjoy the weather (80F is way more pleasant than 105F; leaves changing colors are pretty; snow is fun!)?

Whether you find this explanation plausible or not, the research generally agrees: too many choices result in less satisfaction with whatever you finally buy.

I've meant to comment on this research before...not as a critique of your point but just as a stream of consciousness:

The problem I have with using this to consciously decide not to do as much comparison shopping/research/whatever, is that, while I may be more satisfied with my purchase, I'm less satisfied with the way in which I made my decision. My gut feeling is that in terms of overall satisfa... (read more)

As a request for elaboration: what is a good strategy to move to another city?

The current strategies I am aware of are: 1 .spend 2-5 days house hunting, contract it and move and live there for years. 2. get any temporary place that is reasonably close to the work location. Spend a few month house hunting, and then move to the new permanent home.

Add for people that have to move families is the decision between moving everyone right away and moving alone first and having everyone else follow later. Possibly in alignment with holiday times, end of school year and such.

3taryneast9yMy parents moved internationally twice, and so have I and both of my sisters. From our collective experiences, I'd recommend the second option. Find a place to rent for a year, then house hunt without the pressure, and after having a much better idea of good locations, commute-times, schools and the option of a whole year to spot potential good bargains (if that's your wont). One year is short enough that you can put up with the flaws you're likely to find with the rental place... and possibly even get a better idea of what you "really" want in your house anyway. As to moving everyone vs following on - that's very dependent on the individuals involved. It's very hard for some people to live apart. It's very disruptive for kids to leave school partway through... you'll have to decide what's best for your family there.
0Jolly9yIt depends on how long you expect to live in said city. I suggest spending some time couch surfing first - it'll let you get a better understanding of possible areas to live in, and start developing friend networks!

This seems like it would be very useful, I'm going to bookmark this.

Side note: Could a feature be added to allow people to favorite articles for easy access?

5anonym9yYou can 'save' an article by clicking the disk icon above the 'Tags' section below an article. There's no link anywhere to see articles that you've previously saved, but you can manually go to the following URL to see them: http://lesswrong.com/saved/ [http://lesswrong.com/saved/] It seems like an oversight on the part of the developers that the 'saved' functionality they got for free from the reddit codebase still works correctly, and the saved pages are accessible, but there's nothing in the UI that indicates how to access the page of previously saved articles.
0falenas1089yAh, thanks.
0shokwave9yYour browser contains such functionality; no need to duplicate it.
6gwern9yI actually agree with you. There are many simple or sophisticated solutions of various kinds for browsers, ranging from the builtin bookmarks to extensions like ReadItLater to bookmarking websites like Delicious. There is no advantage to doing it inside LW, and if there were, it is a feature that is not a priority. (Reddit has a 'save submission' feature, and it's not one I've ever found particularly useful nor have I heard that others have found it useful.)
0anonym9yI actually do use the 'save' feature in reddit. I find it a handy way to distinguish articles that I found especially useful or high-quality, or that I know I'll want to look at again in the future. Maybe I'm an exception though, because I don't use browser bookmarks or any other bookmarking-type service very much. That functionality still works in lesswrong just as it does in reddit, but there just isn't a link to get to the page that shows all the stuff you've saved, as I noted elsewhere in this thread.

Great post!

I've been thinking about alternative reasons why people living in rich neighborhoods of poor counties are happier.

Maybe the happiness-promoting physical qualities of neighborhoods (green space, lack of noise, feeling safe) correlate with income when they vary between counties, but not when they vary within counties.

I'd expect the poorest part of Pittsburgh to be about equal to the poorest part of northern New Jersey, and the same for the richest parts. (Perhaps less fancy, but I suspect granite doesn't affect happiness that much.) The New Jersey county is ... (read more)

[-][anonymous]5y 0

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[-][anonymous]5y 0

Replies to the comment you are now reading accurately describe my ideas so the original post has been replaced by this disclaimer to spare your time :)

that's the kind of organisation we're looking for, one that kind of finds the problems and talks about them publically, rather than the ones who hide them or don't even know they're there.

  • transcribed from GiveWell_June_2015_SF_Research_Event_Top_Chariti
2gjm5yI hereby declare that, until such time as Clarity pledges to stop doing this, I am going to stop replying substantively to his/her comments. Anyone else with me on this?
0[anonymous]5yWow. I can stop doing it without you doing that pledge. Your recommendation is enough lol. edit 1: wait unless you're pledge is trying to change something else? edit 2: for my understanding, why don't you like the disclaimer idea? I would have adjusted or given up the practice based on upvotes/downvotes in response to gauge the communities reaction. But I feel like this is a strong individual preference against it?
2gjm5yAll my pledge is trying to change is your annoying habit of deleting things that provide relevant context for other people's comments. (I did already recommend [http://lesswrong.com/lw/ji3/lesswrong_help_desk_free_paper_downloads_and_more/cjnz] that you stop doing it, as it happens, so clearly that wasn't enough :-). I explained why at the time.)
0ChristianKl5yIn general content shouldn't be delete unless there's a very good reason to do so. Deleting it prevents other people from reading the discussion in full. If you disown your article you can click on the button right next to edit to strike it out.
2gjm5yI know nothing about the details of your situation, but this doesn't sound likely to be a wise move. Living in a car rather than the cheapest accommodation you can find means (leaving aside the issue of romantic/sexual relationships, though you should reconsider whether burning your bridges there is really likely to be best for you): * More money, but not hugely more money unless you're somewhere stupidly expensive like San Francisco. (In which case you should consider moving rather than living in your car.) * Sleeping in the car rather than in a bed: you will almost certainly sleep worse (hence, be less effective in the daytime) and will likely be setting yourself up for back problems later on, as you say. * Nowhere to work: I guess your plan is to work in cafes or something, where there is noise and you're likely to have to spend more on drinks than if you worked at home. And this works only for some categories of work. * Nowhere to store clothes so you will probably look scruffy all the time. Fine if your experiments on novel consumable services/products never requires you to go in person to see potential customers or business partners, not so good otherwise. * Nowhere to bathe or shower or even wash but presumably there's some workaround for that (but I expect it will also cost money). * You need to have the car eliminating a different way of saving money (which may or may not be viable depending on where you live). * Possible difficulty with law enforcement because AIUI sleeping in a car in a public parking space is actually illegal in many places. * No postal address which may again be awkward for some business purposes, for buying things online, etc. * Nowhere to store substantial numbers of books which you may or may not care about (maybe the cool kids are using ebooks for everything these days). * More risk from crime -- someone can steal your actual home if you do this, and other less drastic kinds
2Lumifer5yNote that many of these problems can be substantially mitigated by living in a caravan (RV). In fact, there is a considerable population of American retirees who live in RVs. There are certainly trade-offs involved, but they make sense for some people.
0gjm5yWhere do they put their RVs? Do they end up paying rent for that? (And: are RVs cheap enough that this makes sense for Clarity, who I take it is young and has little in the way of savings?)
1Lumifer5yYou can put your RV into an RV park and pay rent. You can also park somewhere (e.g. in the US Walmart is well-known for not chasing RVs off their parking lots) and once every few days drive to an RV station to refill, recharge, discard your black/grey water, etc. If you're really hurting for money you can (usually illegally) dump your black/grey water yourself somewhere, get electricity from solar panels, and generally be pretty self-contained. As usual, it depends. Old ones in bad condition are cheap :-/
0gjm5yCheap to buy but presumably not so cheap to maintain. Still, given Vaniver's figures elsewhere in this thread and a plausible guess at the cost of minimal RV maintenance, it looks as if living in your car still does come out cheaper than living in a house or apartment. Those drawbacks seem to me to outweigh that, though, for anyone whose earning power isn't too wretched.
0Lumifer5yThat depends on your situation and preferences. If you are single, have a telecommuting job, and there is some wanderlust in you, living in a (travelling) RV can be an excellent idea. On the other hand, if you have a family with kids, a job that requires your physical presence, a tight social circle of your neighbours... maybe not so much.
0ChristianKl5yI would add: A social circle who thinks RV are cool and not a sign of low status.
1Vaniver5yThe traditional approach here is a gym membership. Likewise, a PO Box. (This doesn't work for everything, but gets close; I know there are a handful of online mail services for nomads that I am not familiar with.)
0gjm5yYup. But these aren't free, and the whole point here is to save money. (Right?) I don't have a very good idea of just how not-free they are, though; Clarity should do the calculations and work out just what the saving ends up being.
1Vaniver5yEach of those are roughly $10-20 a month.
0gjm5yThat's a lot cheaper than in the UK where I am, I think. (Typical gyms seem to be at least ~£30/month; PO box ~£20/month. £1 is about $1.60. Perhaps one can do much better by seeking out the cheapest. I haven't looked very hard...)

Re: Commuting time: as others have noted, there may be a big difference between driving vs. public transit. I take a bus and train to work, and when I moved from a 40 minute each way trip to a 1 hr 10 minute each way trip I noticed very little difference because I spend the time reading the newspaper and playing games, or sometimes napping. On really crowded days sometimes I will even take the train the wrong way one stop to the end of the line and get back on so I can have a seat. Though, I also work from home 2 days/wk, which helps a lot too.

Re: Guest ... (read more)

I pointed this out in a Newcomb's Problem discussion, but being willing to pay $X in time and expenses to save less than $X on an item can be thought of as a variation on Newcomb's problem. If you precommit to drive long distances to save money on the sticker price, stores will predict your behavior. Those stores will then realize that they must compete in price against stores that are long distances away. This greater competition will lead the stores to lower their prices more than they would otherwise and you will see lower sticker prices, both far aw... (read more)

A related question is whether buying a home is rational at all, when compared to renting. Obviously it depends on how long you plan to live in the same place, but I've seen a lot of people buy and be tied down by houses even when in expectation they'd only be living in the same town for a few years. Can anyone point to a good discussion of the calculations involved here? (I imagine the end results will vary country by country - for example, by impression is that in parts of the UK, where I live, houses cost more relative to rent than in other places.)

In a telling experiment under the same protocol as the ones listed above, people asked to reflect upon their choices were more likely to choose the house with the extra room for Grandma than the house with the shorter commute times, because the extra reflection gave more opportunity for the availability heuristic to come into play.

In this experiment, did they control fro the availability heuristic in any way? Like having a list where they are asked whether they prefer short commute times to several low-probability things and so that they compete with on... (read more)

Cool, i had all these things instinctively right when buying my house.

Unfortunately out of the 6 people living here i have the biggest commute :(

I live in one of the best-lit houses i've ever been in. The neighbours who miss 2 windows compared to our house, but are otherwise exactly the same looks like a dark crypt. The colors you use and the way you place your furniture also plays a big role in lightness.

Psychologists aren't entirely sure why people so consistently under-count the pain of commuting.

Maybe because people aren't aware of the damage being done to their health by long-term exposure to the extremely high levels of toxic gases found on any major road.

0Jakeness8yCorrect me if I'm wrong, but you can avoid most (all minus epsilon) of the exhaust fumes be keeping your windows closed and recirculating air from the vents. Commuters should be more concerned with having a car accident. AFAIK, people discount the relatively high risk of death and serious injury resulting from traffic accidents.
2CCC8yI find that if I keep the vents closed on for long enough, then I start to feel somewhat sleepy and don't notice it. This is a bad thing to happen while driving. I suspect that it may be caused by consuming oxygen faster than the imperfectly sealed vents are letting more oxygen in; the symptoms vanish quickly if I restore access to external air, either by opening the vents or opening the window.
1Jakeness8yInteresting. I'm going to try to look out for that from here on.

I can tell the author really likes TED videos =)