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It is very easy for survey respondents to say that they are not happy, or to take positions which seem “out there,” the reason being that people rarely have the proper incentives to reveal how they actually feel about various policies and positions. For example, Robert Frank (e.g. author of Luxury Fever among others) has often decried “conspicuous consumption” of Americans as wasteful – particularly because he believes people consume houses that are “too large” and schools that are “too expensive”, etc. only because societal pressures force them to do so, and that in his ideal world (read, one that is controlled by more erudite citizens) these wasteful expenditures would be curtailed by higher taxes, with no subsequent loss of happiness or efficiency (utilitarianism in its worst form). In this race to have the nicest house on the block, or have their child in the best school, families compete with one another for status, in what is essentially a zero-sum game – in that the result of competition for status is that relative positions will not change, but aggregate spending will be “too high.”

Much of the evidence for this theory has come from individual survey responses. But which is more reliable, someone answering a question when there are no stakes involved based on the answer? Or, someone acting in their own interest, when there are substantial consequences to be faced from each decision?

Well, Alex Tabarrok took one of Frank’s recent comments to the actual data. Robert Frank, based on survey data, claims that people would rather live in 3,000 square foot homes in a neighborhood of smaller homes (big fish in small ponds) than live in 4,000 square foot homes in neighborhoods of McMansions (small fish in bog ponds). In other words, he claims that absolute standards matter far less than relative living standards. Well, Alex Tabarrok actually uses data from Northern Virginia to determine whether in fact people (in this admittedly small sample) really behave in ways that are consistent with what they say in surveys. The answer is a resounding no. He finds that people do NOT want to own the biggest house in the neighborhood. While larger lots sell for more money, the increase in price is smaller when your lot size is bigger than the average lot size in your neighborhood.

I am sure people on both sides of this ones will construe examples which will enable them to confirm their pre-existing beliefs, but at least in the case of Alex T., he goes to the data – and for me that is superior to any survey a scientist might construe.

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