Supply and Demand Is Not What Most People Think
shonczinner.substack.com
Supply and Demand Is Not What Most People Think
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Re: Supply and Demand Is Not What Most People Think
#2This just seems like "well ackshually" pedantry that is ironically incorrect. The supply and demand curve as a specific mathematical model describes commodity markets which housing isn't.
Supply and demand are still useful concepts to understand prices in other markets, but the main insight is simple: that higher supply generally leads to lower prices given fixed demand and higher demand generally leads to higher prices given fixed supply.
Re: Supply and Demand Is Not What Most People Think
#3For the first questions, I think the reason most people answer like they do is that when you ask a question in the form "if we change A, what happens?", the implication is that no other relevant variable has changed. And sure enough, if we just build more houses, housing will get cheaper. The article then says "actually, the reason we built more houses is because population is increasing, so housing gets more expensive". This is the kind of details that should be in the question.
It is like asking "if you press the gas pedal harder, will your car go faster or slower". Of course people will say "faster", but then you say "got you! if the reason you pressed the gas is because you are climbing a slope, you are going slower".
Re: Supply and Demand Is Not What Most People Think
#4This just seems like "well ackshually" pedantry that is ironically incorrect. The supply and demand curve as a specific mathematical model describes commodity markets which housing isn't. Supply and demand are still useful concepts to understand prices in other markets, but the main insight is simple: that higher supply generally leads to lower prices given fixed demand and higher demand generally leads to higher pri…
i read this before the article and thought “alright it can’t be that bad”… honestly, you are letting them off easy. it’s like pedantry, but the dunning-kreuger kind.
Re: Supply and Demand Is Not What Most People Think
#5For the first questions, I think the reason most people answer like they do is that when you ask a question in the form "if we change A, what happens?", the implication is that no other relevant variable has changed. And sure enough, if we just build more houses, housing will get cheaper. The article then says "actually, the reason we built more houses is because population is increasing, so housing gets more expensi…
Yeah, a common problem in cognitive bias research...
Re: Supply and Demand Is Not What Most People Think
#6This just seems like "well ackshually" pedantry that is ironically incorrect. The supply and demand curve as a specific mathematical model describes commodity markets which housing isn't. Supply and demand are still useful concepts to understand prices in other markets, but the main insight is simple: that higher supply generally leads to lower prices given fixed demand and higher demand generally leads to higher pri…
i read this before the article and thought “alright it can’t be that bad”… honestly, you are letting them off easy. it’s like pedantry, but the dunning-kreuger kind.
tbh it read mostly like gibberish to me, but seemed possible there might be some poorly-articulated but otherwise coherent point about the difference between the technical difference of a supply or demand curve "shifting" vs the turbulence of a market finding equilibrium when the curves are steady.
Either way it doesn't matter bc housing isn't a commodity, and what Noah Smith said wasn't incorrect.
Re: Supply and Demand Is Not What Most People Think
#7Meaningless to me without pictures