Home buying and hedonic regressions

Here’s a fun game you can play if you are presently in the market for a home. One could consider a variety of home characteristics, but if you are in the market for a school district, the pricing lines should be very crisp. And you must be in the market for your own family. Speculating on what others will do just isn’t the same.

If you are not familiar with hedonic regressions, it is a mathematical process where given a set of data, which is subjected to an equation built with defining characteristics, the numbers reveal the various levels of importance of each feature. If we are looking at housing prices, the coefficient in front of the school district data will tell how much of the home price was dedicated to that selection.

But you don’t have to be a math geek with access to a bunch of data to come up with a result! I’d say any buyer who is seriously evaluating this choice can shoot from the hip (after looking, bidding and seeing the values the properties commanded at close). Ideally you want to be considering two school districts which both contain similar homes to choose from within their school boundaries– say a 90’s built two story with four bedrooms up and a nice yard for the kids.

Even non-number types of buyers will be able to discern the differences when their money is in play, or their abilities to access other ideal features. School districts can swing a home value price as much as 15%, so on a home of $450K, a $67K difference. That’s noticeable. And consistent opinions about districts, which affect a great number of buyers, filter out in the numbers.

Buyers do not need regression models to calculate the price of other features. The distance to job centers, for instance, or the premium for a prestigious neighborhood. People will pay to be closer to work in order to spend less time in the car. They will also pay for neighborhoods with corner restaurants, quaint historical business crossroads and neighbors with recognizable names. The numbers here are large enough so that no pointy pencil needs to scratch out a calculation.

But there are hundreds of neighborhood features which are priced out in the offer on a home. And many of these could be better understood with the help of a little math.

Timing a move

People move households a variety of times throughout their lives for a variety of reasons. Depending on your data source, Americans move every 7-9 years, with more frequent moves in young adulthood and more sedentary behavior in later life.

This makes sense. As folks move through different stages of life, both from an income stand point and a lifestyle standpoint, they want a different combinations of neighborhood amenities. These are not questions of ‘good’ things versus ‘bad’ things. These are simply mixtures of choices.

When you are young you may want to live near entertainment and restaurants. Once there are kids in the household, going out to shows and restaurants quickly takes a back seat to prioritizing daycare, schools, and after school activities. Stability of residence can be important at this stage as rearing children benefits from consistency.

If the norm is to move, to seek out new living arrangements that better suit new objectives, than wouldn’t incentives that lock people into a location be holding them back? Financial incentives such as rent control do exactly that. It discourages mobility.

And I’m not saying people who need help shouldn’t still receive help. I’m saying that paying people to live in the same set of living circumstance through all stages of their lives goes against the norm. Which leads one to believe it is a drawback in the long run, for a perceive protection in the short run.

Nesting, Public Goods and Price signals

Public goods often exist in a nested structure. The household, the neighborhood, the ward, the city, the state. The classroom, the elementary school, the district, the states’ Department of Education. At what point is it clear that a rung on the ladder needs help in its delivery of the good?

Earlier in the month it was reported that a charter school, Cedar Riverside Community School, would be closing. It serves a neighborhood of high rise subsidized housing nestled between downtown and the University of Minnesota. Lauded as culturally sensitive in its delivery of education to a mostly Somali immigrant community, it has been plagued with threats of closure due to poor performance for more than a decade.

There are many good intentions, hopes and aspirations at the ground level for these types of grass roots public goods to be successful. But when are the price signals strong enough to cause the rung up the ladder to engage, and supplement the production of the good. When is the loss great enough to tip the efforts away from the local level and demand services from a superior level?

With the bright flood lights of the world stage focused on our metro and its racial disparities, it’s hard not to imagine that the closure comes in the wake of last year’s events. It seems pretty costly and inefficient to wait for a crisis to fess up to the fact that these kids were not being served by their neighborhood school.

Maybe the better question is what are the powers in play which dampen or misalign the the signals of lost public good delivery? What stops the natural interactions of feedback and improvement that occur through the system elsewhere?

I can only speculate from afar, but it seems to boil down to two components: structure of (for pay) jobs and positions of power. An enterprise, whether a company or a school is composed of an interlocking group of paid employees. These are entities composed of W2 workers whose livelihoods depend on keeping the boat afloat. A company will sink if it fails to attracts consumers. As long as a school has a pool of students within its attendance boundaries, it will receive funding.

In a typical neighborhood, people with school age children will leave the neighborhood if they feel the schools are inadequate, while others would-be-buyers into the neighborhood will look to settle elsewhere. The dynamics is a little different in a neighborhood like Cedar Riverside as many of the residents are tied to their housing through subsidies. The lack of mobility creates a type of monopoly on the residents both for their support of the school as well as the political structure.

The end result is that the price signals–the signs that the pupils are failing to receive the public services which inevitably are an expense to them and their communities later in life–are muted. They are not able to exit. Their presence in the group is taken for granted by those in paying jobs and those with political power.

La Fontaine

There were a lot of things I liked about going to French schools as a youth, but one that stands out is the discipline of recitation. A student prepares a poem and delivers it in front of the class. You were graded on tone and inflection, on cadence and emphasis. The French take their language seriously, and you are to deliver the words just so.

Scratchy pencil markings on Le Rat de ville et le Rat des champs show where to slow down, where to come to a full stop. Scribbled in are indications of the rhythms. While holding the little book in front of my peers, I most likely kneaded my sweaty fingers into the cover as I plied back the binding. The activity may have alleviated some trepidations of being front of a crowd.

It is delightful to say the words just right, to have them tumble out and be heard amongst an audience. It is not the same as reading the text in one’s head, in the same way as reading a play falls short of a production. It’s really a shame that the US school system lacks this emphasis on performance and language. Completely contrary to saying there is only one way to get one’s tongue around the words, as perhaps the French do, it is about how words are articulated to add meaning. The delivery is a disclosure of more than the words themselves.

Fables, whether by Aesop or by La Fontaine or La Fontaine’s version of Aesop, are subtle in their meaning. Some might say Straussian. There are of course the sweet little creatures having adventures. The Tortoise and the Hair, or the Lion and the Mouse. Creatures not like each other interacting to tell us that outcomes are sometimes unexpected. That we should not presume to know everything.

La Fountaine along with his contemporary Moliere were well known for cloaking messages, designed to instruct without offense. Both were successful in their lifetime for although their subject matter thrived on human foibles, the ruse of concealment let each audience member interpret the piece as they desired.

An instance vs a life-time

The world of Twitter and Instagram promotes the power of a snapshot. It’s a small-package delivered to pack a punch. Not only is it how a lot of information is disseminated to audiences in the millions (in small frame, limited view, no historical placement setting) but has also become the most popular vehicle of public debate, or hollering.

Recently there has been lot of admonishing of our north star state with data claiming Minnesota has the largest achievement gap between majority and minority populations. Let’s consider how this datagram could mean something good instead of assuming it means something bad.

If Minnesota abruptly welcomed a large group of immigrants with no English language skills to the state, the state would be celebrated as humanitarian and good. But of course, for a number of years (how many? ten? a generation?) Minnesota’s numbers for minority education performance would be affected, as not knowing a language is a serious impediment to learning. That makes Minnesota a bad place for minorities.

Minnesota also achieves very high performance amongst children with long time residency, which makes Minnesota is a good place to live. But of course this exacerbates the difference between scores with those who have come more recently, less well equipped, which once again makes Minnesota a bad place for disparities.

It is like the comic strip with an angel and devil on each shoulder whispering their arguments in each ear. Each little creature gesticulating wildly while the face between them looks comically confused.

Raj Chetty is an economist at Harvard who studies, among other things, equality of opportunity over time and place. After all, what we want is a culmination of activity to produce a result. One time snapshots capture a measure at a particular time. A piece of information. They are woefully barren of any wisdom.

His research shows that the Minneapolis area is in the lead among large cities in cultivating the greatest income growth for children of poor families, by age 26.

Brookings

The issue of time and setting must be made part of any half intelligent conversation about these issues. The public goods a city provide can’t possibly be evaluated in moment-in-time snapshots. And people who to try to navigate this path are more likely activists out to promote one point of view, not for a public benefit, but for their private initiatives.

San Francisco comes to its senses

San Francisco schools have decided not to spend the time and money to rename 44 schools.

The San Francisco Board of Education will ultimately keep the names of dozens of public schools in a case of high-stakes second thoughts.

It seems we are seeing a turning point in the ridiculous posturing against ghostly foes of yore. And the objections came from a wide selection of practical folks from both sides of the aisle.

The reversal was met with relief and enthusiasm by disparate critics united in their opposition to the project. Conservatives characterized the effort as cancel culture run amok, while liberals decried the woefully poor research conducted by the blue-ribbon panel that led to the lengthy list of school names to be changed.

San Francisco School Board Rescinds Controversial School Renaming Plan : NPR

Here in Minnesota, we are experiencing an attendance problem. Now that buildings are opening up again, it’s time to try to lure the 17,000 Minnesota kids, who left public school, to get back on the yellow busses. Some may have settled into parochial schools, but the vast majority, according to reports, are being home schooled. Or at least are at home.

Let’s hope these families return to valuing our teachers, the socialization benefits of in-class learning, as well as the extra curricular activities. At an approximate revenue of $14K a pupil, there’s a $238 million dollar missing entry in the public school income ledger.

Equality at odds with Progress?

There’s a new paper, Lessons from Denmark about Inequality and Social Mobility, by James J Heckman and Rasmus Landerso. Here’s the abstract:

Many American policy analysts point to Denmark as a model welfare state with low levels of
income inequality and high levels of income mobility across generations. It has in place many
social policies now advocated for adoption in the U.S. Despite generous Danish social policies,
family influence on important child outcomes in Denmark is about as strong as it is in the United
States. More advantaged families are better able to access, utilize, and influence universally
available programs. Purposive sorting by levels of family advantage create neighborhood effects.
Powerful forces not easily mitigated by Danish-style welfare state programs operate in both
countries

What I find interesting is the framing of their analysis around neighborhoods. They find that even though teachers in Denmark are paid the same salaries, there are still different outcomes for children which appear to be a result of families sorting themselves by neighborhood.

One good example of this phenomenon is the quality of schoolteachers by clusters of parental
characteristics. In Denmark, teacher salaries by neighborhood are mandated to be equal. That is
a force for uniform quality of schools across neighborhoods. However, uniform quality is not the
actual outcome in Denmark.

The sorting continues down through to the teachers.

There is a strong positive association between the characteristics of parents, on the one hand, and the characteristics of teachers on the other, despite equality in wages.

Even with an equalization of monetary compensation to the educators, the more established families gain the preferred access to education. And thus equal opportunity to education is not being realized.

But is this one of those everything-should-be-equal that makes sense or is counter productive? Are the measures and classifications and groupings done in a way that divvies up into a state of balance?

I don’t think it is a controversial notion that those on the lower rung of academic performance are more likely to be motivated by seeing themselves in their teachers and mentors. And until those teachers and mentors are brought along into this higher level of academic delivery, the system that looks for those mentors will have unbalanced delivery systems. By choice. And this may very well be the best delivery for that moment in time.

Here is a scenario where fine tuning and focusing in on what is thought to be an issue of equality maybe sabotaging the path for greatest progress. By drilling down to the tier of the individual, one dismisses the group. To bring along the child can only be done by bringing along their larger group, including their parents and teachers.

Revolt?

It might be my imagination, but I sense a subsurface tension in the teaching community around the issue of the extended Covid school closings. It lurks like other things you can’t quite detect: a high pitched dog whistle or the floor beneath your feet right before a quake. Or even more material things like the moisture on your brow and that earthy smell in the hour or so before thundershowers roll in.

As long as the virus is still taking lives, the topic is off the table. But soon everyone will be vaccinated. Soon the teachers will be taking account of where exactly their students are at in the curriculum. Some who normally enjoy the challenge of working with the most in need, may find their charges have have slid in arrears, past due even for assignments pre-Covid.

Without the structure of school, without the routine, without the expectation of someone waiting for them, recognizing them, without the the fun as well as the drudgery of the school environment, they simply stopped paying any attention to their education.

As an outsider looking in, it seems the teacher’s union towed a tough line. The virus put teachers’ lives at risk. The end. Apparently their work is not essential to the functioning of society. Decades of negotiating wages and benefits right down to each and every minute of their instructional day has made it easy to disregard any intent of the job and only see their work from a pecuniary point of view.

How the teachers who carry an old school sense of service to the community feel about this very privatized manner of handling their chosen profession is yet to be seen. Unions deserve credit for elevating teachers’ wages, and after all, spirit or no spirit, one has to pay the bills. Still–in years gone by, teaching was more of an employment of the heart, it involved a sense of duty, and was regarded as such.

So this cocooning of teachers away from the public while grocery workers and nurses became celebrated frontline workers, this buffering of their duties to educate seven, eight and nine year olds through Zoom screens can’t possibly fulfill the desire to be in good standing within the community. Some might feel the dignity of their work has been stolen out from under them.

Maybe when they were young pups trying to figure out their career choices, they absorbed the fact that teaching would pay less than other professions in business or law, but as a counter balance, they valued the sense of contributing to a greater cause. Teachers are trusted. Teachers are a source of advice. Teachers have the ability to play the role of a connector. At least for now.

For every minute of labor, the union has monetized their job. Perhaps the process has squeezed out any compensatory allocation to good will, to the noble cause. The power of the union is to talk in one voice. Then there is little hope of those within, who oppose its direction, being heard in any way.

This is all speculation on my part, of course! Classes are resuming, and by next fall all the soldiers will be marching to the old familiar cadence. Everything will be chalked up to the unprecedented and unanticipeted year of the plague. No matter. A little inkling persists. If you strip all the community value out of a labor force who is inspired by it, has worked for it, defends it; if you monetize every last moment of their day, at some point workers will revolt.


Try something new

The drum beating earlier in the week about cancelling student loan debt was abruptly muffled by the president. In response to Chuck Schumer (D-N.Y.) and Elizabeth Warren’s (D-Mass) proposal to forgive up to $50,000 in student loans:

“I will not make that happen,” Biden said when asked at a Milwaukee town hall hosted by CNN Tuesday night if he would take executive action on loan forgiveness beyond the $10,000 his administration has already proposed.

Biden Balks At $50,000 Student Loan Debt Forgiveness Proposal | HuffPost

Some people think student loan forgiveness falls into a moral category. Society has an obligation to advance citizens through education; that college is an extension of the k-12 necessity to set a youth up for a productive life. The debt should be waived on principle. Of course this gets a little messy post grade twelve, as vocational choices, and the education they require, vary tremendously. And for this reason I think free college will always be a non-starter.

But why waste good numbers when they are out there for consumption? The debt figures can be, and should be, put to good use. When aggregated up to the federal level they loose some nuance. But at the local level it maybe possible pull some levers and leverage a few social objectives at a time. The results maybe more interesting than a simple money transfer.

Case 1. Say there were two objectives on the table: student loan debt and career advancement. One would look for organizations at this intersection. There are hundreds of business associations in Minnesota. Local Chambers of Commerce might be first to mind, but there is the Iron Mining Association or the Minnesota’s Corn Growers Association or even local PTA’s. Say an association was given access to a pool of federal funds marked for student debt relief, with a catch. There is a trade involved. Once the Mining association, or corn growers, show proof of employment of a new-to-the-profession worker (for at least x-amount of time), then they can allocate relief to the student they deem eligible.

It’s a community grant (given to an individual) in exchange for making an effort to lift a worker up and into a new stage of professional development. Many of these associations have a history of giving out scholarships, and a process in place for evaluation. They are well regarded in their communities and have a reputation to protect in the administration of debt forgiveness.

The relief recipient advances economically from the removal of the debt. The business community can justify the extra work or training necessary to bring an inexperienced employee into their field. The new employee hopefully evolves to see the rewards of elevated employment and not just feel the demands of the additional expectations in a challenging position. All those who step outside their norms to make this happen find comradery with others not like themselves.

Case 2. Here’s another example. Say an elementary school attendance area is experiencing a sharp downward trend in enrollment–and the demographics confirm the trend to be long term. The risk of school closure is high. Closing a building is not only expensive for a school district, but the loss to a neighborhood can be devastating. Short term it brings angst to the families who now send their young children to a building out of the neighborhood. Long-term it can be difficult to reverse the negative impact from the closure.

Say the federal government allocated a pool of student debt relief money to the elementary school’s attendance area. Now imagine that there is a household with young children who would qualify to purchase a home in the area if a portion of student loan debt was forgiven. The local PTA in conjunction with a local mortgage bankers’ association could be in charge of distribution. This scenario leverages three objectives: debt relief, school support and housing.

Local control over distribution of funds could refine distribution in a way which engages incentives to accomplish other objectives within communities.

Labor Wedge

Some words or phrases latch onto you like thistles while walking through blooming prairie grasses. They tag onto your pant leg until you notice them and pluck them off for a closer look. Labor wedge has such a nice visual, a separation between what a model is predicting and the empirical data, I think that’s how it wedged its way into my thoughts.

It seems to be a fairly new macroeconomic term, defined at the start of a paper by Loukas Karabarbounis, University of Chicago, as:

Do fluctuations of the labor wedge, defined as the gap between the firm’s marginal product of labor (MPN) and the household’s marginal rate of substitution (MRS), reflect fluctuations of the gap between the MPN and the real wage or fluctuations of the gap between the real wage and the MRS? For many countries and most forcefully for the United States, fluctuations of the labor wedge predominantly reflect fluctuations of the gap between the real wage and the MRS.

https://www.nber.org/system/files/working_papers/w19015/w19015.pdf

At different time periods, American households have found it advantageous to substitute out paid work for something else. They preferred to spend their time, perhaps at home, performing valued activities for their families. Or perhaps the value was found in associational life of another nature. De Tocqueville said years ago that Americans are apt at associational life.

More interesting are the measuring questions. How do we categorize where people have the opportunity to perform duties which build capital for themselves and, most probably, their communities? Where are they exerting energies in lieu of showing up for a paycheck?

Sorting by their economic benefit seems sensible. If the ambitions fall under health related activities (staying out of the workforce to care for an aging parent) then the credit goes to pubic health. If education (during these Covid times people are staying out the workforce to supervise their children’s education) is the goal then shuffle those hours to the public education column of the ledger. If governance (people are choosing to spend their time on park boards or citizen commissions instead of working) is where the hours are spent, then register the tally under civics, and so on.

A better understanding of these motives and ventures will smooth out the prickly problem of labor wedges.

The Crafter, The Contributor and The Covid Tracker

The Crafter

This week’s local neighborhood newspaper reported on a mom type volunteer doing the homey thing and stitching up masks for anyone who needs a buffer from the virus. She puts a plastic bin of them on the sidewalk in front of her home, and only asks that you donate an extra cotton shirt if you have one to spare.

On Wednesdays, Moira Knutson sets out two big plastic storage totes on the concrete walkway of her home. One is empty, for donations of 100% cotton shirts, and the second is full of patterned masks. Anyone who happens to be walking by is welcome to take a mask from the bin, free of charge.

Like many people, Knutson was first motivated to sew masks for health care workers when the pandemic began but is perhaps unique in that she never stopped. By her “guesstimate,” she’s made about 2,000 masks since March.

The Collaborator

Wikipedia was founded almost twenty years ago and has thrived on a volunteer-contributor model. A paper written by Benjamin Mako Hill while at MIT evaluates this form of collective action. His analysis studies why Wikipedia succeeded whereas seven previous attempts, which involved the general public giving of their time to build an online encyclopedia of knowledge, did not. The paper is called Almost Wikipedia: Eight Early Encyclopedia Projects and the Mechanisms of Collective Action.

Abstract: Before Wikipedia was created in January 2001, there were seven attempts to create
English-language online collaborative encyclopedia projects. Several of these attempts built sustainable communities of volunteer contributors but none achieved anything near Wikipedia’s
success. Why did Wikipedia, superficially similar and a relatively late entrant, attract a community of millions and build the largest and most comprehensive compendium of human knowledge in history? Using data from interviews of these Wikipedia-like projects’ initiators and
extensive archival data, I suggest three propositions for why Wikipedia succeeded in mobilizing
volunteers where these other projects failed. I also present disconfirming evidence for two important alternative explanations. Synthesizing these results, I suggest that Wikipedia succeeded
because its stated goal hewed closely to a widely shared concept of “encyclopedia” familiar to
many potential contributors, while innovating around the process and the social organization
of production.

Note that last line: “…because its stated goal hewed closely to a widely shared concept of “encyclopedia” familiar to many potential contributors.” The shared objective was clear.

The Covid Tracker

Bloomberg reports on the Covid tracking project which has been run mostly by volunteers -or- Data Heroes.

Since then, the Covid Tracking Project—run by a small army of data-gatherers, most of them volunteers—has become perhaps the most trusted source on how the pandemic is unfolding in the U.S. The website has been referenced by epidemiologists and other scientists, news organizations, state health officials, the White House Coronavirus Task Force, and the Biden transition team. There are other reliable sources for pandemic statistics, but the project stands out for its blend of rich, almost real-time data presented in a comprehensible way. “I think they’ve done extraordinary work and have met an important need,” says Jennifer Nuzzo, a senior scholar at the Johns Hopkins Center for Health Security, which publishes its own set of pandemic data (and draws some information from the Covid Tracking Project). “They’re tracking things that aren’t being tracked.”

And this:

The project is a demonstration of citizen know-how and civic dedication at a time when the country feels like it’s being pulled apart. Yet it’s confounding that, almost a year into the pandemic, the Covid Tracking Project is doing what might be expected of the U.S. government. “It’s kind of mind-boggling that it’s fallen to a group of volunteers to do this,” says Kara Schechtman, one of the project’s early volunteers, who’s since become the paid co-lead for data quality.

Work–Not for a salary, but for the public

The crafter, the contributor and the Covid tracker all have something in common. They engaged their services once they found a worthy goal. This, in combination with extra time on their hands, as well as a skill that could clearly be leveraged toward a windfall result, motivates the workers to step up. Notice that the goals fall into public benefits such as (pubic) health, (public) education and (pubic) governance. And this just-in-time response, especially when the need is great, out performs the established bureaucratic system.

These are all examples or work in the public sphere.

The battle for the kids

Parochial schools are doing well, from what I hear, in the battle to attract and maintain a student body. They opened on time in September with increased enrollment, and have stayed open through this Thanksgiving holiday. There will be a break in in-person learning now (like all other schools and universities in the area) until January. My sources report no sizeable outbreaks or health concerns for either the learners or learned.

The 91 Catholic schools in Minnesota compose the 4th largest district in the state. This unexpected swelling in enrollment is a benefit to their bottom line. As they do not receive the per pupil funding which finances the public schools, they are on their own to market within their faith community as well as to those who value smaller class sizes. In some cases, sports families are attracted to an increased probability that their athlete will make the varsity team.

The use of direct mailings to reach families throughout the area seems like a good fit. However, when a large public school district, where attendance is dictated by place of residence, pummels direct mail right over school boundary lines, it feels objectional. Why is that? Both the schools are in the business of delivering education, both require funds to operate. Attracting students is the same as attracting customers–no?

Customers use private funds to purchase a good or service. The parochial schools are offering a service, one that complies with the standards set by the state, but has been customized to the requirements of a specific community. The funding that follows a child to the public school district they attend is not private, it is taken from a pool of funds which is collected under mandate to educate all Minnesota kids.

Plus– it isn’t just the funding allocated per child that is lost when a family sends their offspring out of their district. Since busing is only offered within the school boundaries, it is a given that one parent is available to drive them to and from school—or will once the whole virus thing wraps up. By self-selection these parents often donate their time to school activities, fund raisers, and all those extras efforts that make an educational community stronger.

So when a school district pumps a bunch of dollars into a direct mail piece with messaging along the lines of, ‘Hey, we’re better, come on over,’ they are drawing students as well as high-social-capacity families to their district. Which means they are draining adjacent districts in an equal amount. On net, the dollars spent on this type of private business marketing is not fulfilling the state mandate to educate all students. But rather is congregating the haves and leaving behind the have-less’s.

The parochial schools are working in a private sphere even though they are fulfilling a public obligation. So it is fitting for them to use private strategies. Public schools are working in the public sphere so using private methods sets up externalities.

Put me in title

In the is-it-private-or-is-it-public game, I agree that a home is a private good. The event which makes you a home owner is a closing, which in Minnesota, is usually held at a title company. On the chosen day the buyers and sellers sit down (pre-Covid) and the buyers sign up for a mortgage to finance the purchase while the sellers sign over a warranty deed. Done deal. No take-backs. The fees include a little state tax and filing fees so the documents are filed publicly in the county recorders office.

The process almost seems trivial but it so powerful. This singing over of a title and its public recording in a government office is the most significant feature of private wealth in the US system.

Interestingly, there are a whole assortment of local norms and customs revolving around closings across the United States. Most states either close at the table or over an escrow period. In Wyoming, however, real estate agents conduct the closings. Also specified and unique to almost every state is a foreclosure process. Most weigh heavily on consumer protection. And here is an interesting table breaking down all the nit picky processes and fees.

Owning a home is a staple of the American dream. Owning a home ties you to a community where you participate in measure of all public venues: public safety, pubic schools, public transportation, parks trails and the environment, governance and civic pride.

Fireworks

In a recent post, which challenged whether national defense is a public good, I suggested that sunlight was a public resource. Then I got to thinking about height restrictions in new construction, and in particular about a luxury high-rise development that was squashed by neighboring residents. A few years ago plans were underway for two residential towers on the west side of Southdale Center which is in an up-scale suburb of the Twin Cities. When over 200 folks filed into the city council chambers, there were more opposed than in favor.

But dozens of residents spoke against the towers, listing issues with everything from its height to the shadows it would cast.

So you see sunlight can be privatized. The owners of the 50’s built one-level homes to the west argued that the new apartments would steal their sunlight. The two towers would privately claim the warm beams, leaving them in the shadows. In economic terms, the new high rise would externalize shade.

There is a cost to shade. If you sell condos you know that southern exposures are more desirable than northern (though thankfully some feel a south view is a tad too warm). Being that there is more demand for this exposure these condo garner a higher price than those pointed north.

Here’s my original post challenging the breakdown of goods into public, private, club and common. Today I’m challenging the idea that fireworks are a public good. One would think that no-one could be excluded from seeing the fireworks. At least, once you already assume that you really mean no-one who is already close enough in the first place, can’t be excluded. An assumption which in itself, makes it a private good when you live one county over.

Realizing it has this private good, say the city lures people to move to their downtown by advertising an amazing fireworks display on the Fourth of July, shot from a bridge over the Mississippi. By fall the new residents have moved into a beautiful condo overlooking the stone arch bridge which spans the mighty river. By the following summer, however, a new condo building has been built which blocks their view.

Mr. and Mrs. NewRes show up at City Hall hotter than a hornets nest and demand compensation for being denied their access to a public good. After all it was the city that approved the permit that allowed the building to steal their view of the fireworks.

Here’s where I say be careful to identify your public, be careful to know your groups. The fireworks are public to those who show-up in a public space within sight of them. And you say I am splitting hairs. But am I?

When we tell families their children have access to a uniform public education for grades K-12, are we offering fireworks that can’t be seen by everyone? We all know that there are different levels of school performance all across the districts. At least a portion of that performance can be attributed to work done in the neighborhoods which support the learners and the educators in ways that are not supported elsewhere. So when the state says all learners will be provided ‘the same’ public good, is the state committing to make-up for the difference in the neighborhood support? Because that would tally quite a hefty tab.

Who Killed Home Ec?

That’s the title of an article in Huff Post which pens some interesting history on the discipline. Go figure the first women admitted- Ellen Swallow Richards— to MIT is credited with generally credited with its development back in 1876.

Far from regressive the aim of the coursework is described here:

At the Women’s Laboratory, Richards turned her scientific attention to the study of how to make home life more efficient. According to the Chemical Heritage Foundation, “Richards was very concerned to apply scientific principles to domestic topics — good nutrition, pure foods, proper clothing, physical fitness, sanitation, and efficient practices that would allow women more time for pursuits other than cooking and cleaning.”

The categories under the umbrella of home economics today have expanded to seven: Cooking · Child Development · Education and Community Awareness · Home Management and Design · Sewing and Textiles · Budgeting and Economics · Health and Hygiene .

An enhanced understanding of these directly effect community engagement from health to housing, governance to safety. Such a shame to have lost fifty years of home focused education to a stigma.

Fungible is more Fun

What does it mean for a transaction to be fungible, or non-fungible? Here’s the dictionary’s definition for the word when googled;

fun·gi·ble/ˈfənjəbəl/Learn to pronounce adjective LAW adjective: fungible

(of goods contracted for without an individual specimen being specified) able to replace or be replaced by another identical item; mutually interchangeable.”it is by no means the worlds only fungible commodity”

Wikipedia talks about fungibilty in this way:

In economicsfungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of its parts is indistinguishable from another part.[1][2]

For example, gold is fungible since one kilogram of pure gold is equivalent to any other kilogram of pure gold, whether in the form of coins, ingots, or in other states. Other fungible commodities include sweet crude oil, company shares, bonds, other precious metals, and currencies. Fungibility refers only to the equivalence and indistinguishability of each unit of a commodity with other units of the same commodity, and not to the exchange of one commodity for another.

In the sense of a transaction being fungible or non-fungible I offer the following understanding. If you buy your gas at a Holiday station, whether it is on the corner leaving your neighborhood, or the one near your place of work or the one half way to your vacation destination, the transaction is the same. One purchases a indistinguishable commodity which is paid for with some form of currency of consistent value. The transaction starts and ends in a matter of minutes. It is fungible.

Now consider a different type of transaction, one that happens in a neighborhood. Every morning nine to ten kids gather at a bus stop to catch a yellow bus to the local elementary school. School starts at 9am and ends at 3pm. Most kids stay for after school programming so their parents have a chance to get home and pick them up before heading home to pull something together for dinner.

Now say it is mid January in a northern climate, and a mega storm develops predicting twelve inches of snowfall. The schools close at noon before buses full of children slide into the ditch and the roads are gridlocked as the snowplows can’t keep up with the descending flakes. Afterschool programming is cancelled leaving working parents in a bind.

One of the parents, call her Amanda R, works third shift at the hospital, and has the means to contact everyone as the families went through Baby-and-Me classes together at the community center. She lets them know she’ll be at the bus stop to collect the first-through-six-graders and let them hang out at her house. “Drive safe!” emphasises the text.

If the families would have taken personal time from work to the tune of four hours each, that would have amounted to thirty-two work hours. (With an average wage in Minnesota at $58K/yr, that comes to $892). Amanda R doesn’t expect payment for her offer. She knows that over the course of their elementary school experience there will be a track and field day, and the third grade band concert (which only a parent can appreciate) and the fifth grade science fair and the list goes on. There will be plenty of opportunities for parents to stand in for each other.

The work Amanda R did to allow parents to stay at their jobs while keeping their kids safe from harm was a non-fungible transaction. She won’t receive any immediate payment or exchange for her time. She can’t trade those hours with another neighbor down the block. What she’s betting is that she will receive assistance many times throughout her kids’ school experience.

Certainly it might be more fun to work for cash and spend it on concert tickets or new clothes or a trip. But the beauty of non-fungible transactions is that they are held within the group and often engaged when the stakes are high.