Correlation vs. Causation

An recent article in the American Conservative magazine observes that home prices have gone up more in blue states while housing has remained more affordable in red states. Republicans are more likely to get married and have more children, the writer argues, so they want to live in places where they can afford a house with a yard.

Or is it, as Dave Barry once suggested, that living in suburbs and paying property taxes turns people into Republicans? Is the war on sprawl a plot by Al Gore aimed at boosting the fortunes of the Democratic Party?
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Since I am on the road, I don’t have time to explore this in detail, but I am sure many of the commenters will enjoy doing so.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

21 Responses to Correlation vs. Causation

  1. D4P says:

    Is the war on smart growth a plot by The Antiplanner aimed at boosting the fortunes of the Republic Party?

    Makes you wonder…

    An recent article in the American Conservative magazine observes that home prices have gone up more in blue states whilehousing has remained more affordable in red states

    I guess people would rather live in Oregon than Oklahoma. BTW: don’t most of the conservative commentators around here live in the “blue” northwest…? Why is that, if it’s such a terrible place to live…?

    Makes you wonder…

    I’m not sure that the “state” is the appropriate unit of analysis for this kind of research. If you look at voting pattens over the past decade or so, you’ll notice a consistent trend whereby urban areas consistently vote blue, and rural areas consistently vote red. I would guess that “blue” states tend to be more urbanized (or at least have a greater % of their populations living in cities) than “red” states, which probably helps explain why blue states are more expensive.

  2. Ettinger says:

    Very interesting and wide topic.

    There may be a causation effect between red/blue and home price inflation. However in my view this causation is indirect.

    I think that one of the main causations is population density. Living in high density areas is conducive to people taking up a more collectivist and regulatory philosophy to life. In high density areas there is more momentum to have rules about whether and when your garbage cans can be left outside, whether they can be visible or not, what constitutes an “aesthetically proper” front yard, a well kept exterior house paint job, when and what laundry can be hanged outside to dry, how long and when can your car be left parked in front of your house or your driveway, what architectural style façade should the new building around the corner have etc. Collectivism and regulation then act to create rules that restrict the housing supply leading to home price inflation as we have discussed many times.

    But a regulatory collectivist mentality also draws people to the Democratic Party since the Democratic Party philosophy of the last few decades, embodies a more big government interventionist – collectivist mentality. By contrast, the small government laissez faire mentality exists primarily within the Republican Party. While this is not the Republican Party of the current Bush Administration, most people can sense that the Democrats (especially the current breed) want an even bigger government than the current Bush Administration.

  3. D4P says:

    most people can sense that the Democrats (especially the current breed) want an even bigger government than the current Bush Administration

    Or, maybe the want to cut spending in some areas (e.g. Iraq) and increase it in others (e.g. the U.S.).

    That needn’t result in an overall increase.

  4. Ettinger says:

    D4P said: “I guess people would rather live in Oregon than Oklahoma. BTW: don’t most of the conservative commentators around here live in the “blue” northwest…? Why is that, if it’s such a terrible place to live…?”

    No. It is a wonderful place to live, but those of us that moved here so far, now want to close the door behind us (a narrow minded and self destructive approach in my view) and that draws us to the regulatory philosophical framework embodied by the Democratic Party.

    Of course it is a wonderful place, and that is why when I moved from Europe to the US, I chose the West (why move to a place that is similar to the place you escaped from?). But I think that closing the door behind me would be a mistake. A mistake that will stifle the vitality of the West, and the regulatory – collectivist mentality would very much transform it into something akin to the Europe I left.

    Once again, before you jump on that boat, I suggest you go and live in Europe, as a European, for 5 years.

  5. Ettinger says:

    D4P said: “That needn’t result in an overall increase.”

    Once there’s an increase in spending especially on a domestic program, it never goes back. It takes a simple majority to increase spending or to pass new laws but it takes an overwhelming majority to backtrack from existing government spending or to repeal existing law, and that is why it happens so seldom and that is why government always advances, it never retracts.

    BTW, I don’t think that the small government branch of the Rep Party is in favor of war spending.

  6. D4P says:

    There are at least two reasons to oppose more growth in the area one lives. One is the “close the door behind me” mentality of which you speak, and another is an honest desire to protect remaining open space, habitat, trees, rivers, etc. etc. etc.

    It is my personal opinion that those on the “right” are more likely to be “close the door behind me” people (see, for example, gated communities), while those on the “left” are more likely to be “protect the environment” people.

    That being said, “protect the environment” people should acknowledge that they are having some negative impact on the environment too, not just potential future residents.

    And regarding the livability of the northwest: I find it bemusing that the antiplanner types around here (1) love the northwest, and (2) criticize the land use regulations that are largely responsible for much of what they love about the northwest in the first place.

  7. Unowho says:

    Citing The American Conservative ? I thought The AC and the Cato Inst./Reason Org. were at war.

    As for Mr. Sailer, he’s overreaching; housing cost and family-friendliness are factors considered in deciding where to live, not a determinant of political preference. For every geographic/political demo Mr. Sailer cited, I guarantee I can counter with one that demonstrates the opposite. Too long to get into here, but Fairfield County, Connecticut is an example.

    Also, I wish conservatives in general would get off the supposed red-state advantage in rectitude. E.g., NYS has a lower divorce rate, and personal and property crime rates, than Texas; Same results if you compare NYC and Dallas. Highest rates of meth abuse? Nevada, Montana, and Wyoming. Out-of-Wedlock births? Tend to be higher in rural areas.

    Deterministic models of human behavior are comforting to clients, rarely useful in reality.

  8. Ettinger says:

    D4P said: “…and another is an honest desire to protect remaining open space, habitat, trees, rivers, etc. etc. etc.”

    It is the same thing. Exactly, you want to close the door so that nobody else “spoils” your open space, nobody else builds a house like yours where your open space is. Open space like what once was the land your own house sits on. Apart from being ethically wrong to deny others opportunity, it is also a very very expensive approach. Look at the San Francisco Bay area where peole have to work an extra 10 years to cover the additional housing costs which come, almost entirely, from their desire to preserve open space (which open space BTW even belongs to somebody else).

  9. D4P says:

    It is the same thing. Exactly, you want to close the door so that nobody else “spoils” your open space, nobody else builds a house like yours where your open space is

    It may overlap, but it’s not “the same thing” because environmentalists care about the environment everywhere, not just in their own community. Close the door people, on the other hand, don’t mind if growth happens elsewhere: they just don’t want it in their community.

    There’s a difference.

    And as to preservation being expensive: you should see the alternative.

  10. Ettinger says:

    D4P said: “…environmentalists care about the environment everywhere, not just in their own community.”

    That is, everywhere, except the place where their dwelling is built on?

    If you repeated the calculation I did yesterday for Australia for the US, with every American dwelling being on a large ¼ acre lot (~11,000 square feet) you would find that less than 5% of the US would become urbanized. Is that such a big problem?

    While, as with every movement, there are some pure ideologues, the main political force here is perceived personal interest ie. NIMBIsm and environmentalists who do not want to see any evidence of human presence where THEY hike and where THEY play now, or may play in the future. Mix that with a little bit of envy for those who are more accomplished and you got a pretty complete picture of the current situation.

  11. TexanOkie says:

    Obviously it depends on where in both states is being compared, but overall I would much rather live in Oklahoma than Oregon. And I’m a planner.

  12. msetty says:

    I want to mention an article from Australia regarding a land release in Melbourne with the goal of reducing housing prices. See here.

    Of course Wendell Cox is claiming a victory on his blog; Doh!Homer!

    In reality of course, the situation is much more complex than either Randal or Cox will admit, including the fact that tens of billions $Au in mortgages have been taken out by housing speculators; according to the Housing Crisis series linked on the article’s page, there are over a million single family houses that have been bought up by speculators in Australia, which for a county of less than 25 million people is an astronomical percentage.

    The resistance to new housing construction in higher density areas despite demonstrated demand is also a factor, and of course something Cox won’t admit. Pesky Aussie facts!

  13. Ettinger says:

    msetty said: “…over a million single family houses that have been bought up by speculators in Australia, which for a county of less than 25 million people is an astronomical percentage.”

    Speculators move in exactly because they anticipate that building restrictions will inflate housing prices. I’ve made money on such deals too.

    You buy a house, you also fix it up some, rent it and wait for building restrictions to inflate housing prices. Then comes the guy who just got married, has a new family and is looking for a bigger place to live and you sell it to him at a large profit. Ironically this is the same guy who, when younger, living in a downtown apartment, was campaigning for smart growth. Now both him and his wife have to work until they are 65, and meanwhile send the children to daycare, to pay for their suburbanite spot under the sun. But somehow he does not see the connection to his mountain biking days when he was campaigning for open space and smart growth.

    ——
    No matter how much land gets opened up for development in Melbourne, if housing prices remain high then it means that not enough land is opened up. The correlation is pretty much direct.

  14. the highwayman says:

    There seems to be some confusion over the word “conservative”. Just because some one is right winged doesn’t mean that they them selves are conservative, Most right winged people tend to be very liberal for example Mr.Cox & Mr.O’Toole.

    Also as for suburbs they don’t have to be substandard, they can be walkable and transit friendly too.

  15. msetty says:

    Ettinger, One of Europe’s Leftovers…

    Speculators move in exactly because they anticipate that building restrictions will inflate housing prices. I’ve made money on such deals too.

    You are technically correct in this detail, but dead wrong in “The Big Picture.”

    If you had bothered to look at some of the Aussie articles in The Age’s Housing Crisis series, you’d have learned that the Tories down there loosened up the banking regulations so much that speculators could get better deals in terms of mortgages than standard housebuyers. The Aussies were just as caught up in the housing bubble as the U.S., as the current inability to sell or even rent houses down there is paralleling the U.S. housing recession. If there actually was a housing shortage in absolute terms, rents would have been skyrocketing along with the housing prices.

    Last time I checked, there was no huge rush to emigrate from Europe to the U.S., as opposed to 3rd World countries or Asia…no rush from Canada, either, except for those in the entertainment and high tech industries, which is more a condition of the limited Canadian market for those things rather than negative social conditions.

    What country did you live in, anyway? If it was England, I can understand your move to the U.S. from Blair’s increasingly Big Brother camera on every streetcorner society. In a lot of ways, I wouldn’t count that strange little island as a mainstream part of Europe, particularly for the pecularities of Anglo-Saxon culture, the defects of which are shared by the U.S. and England, and to a lesser extent by Canada, Australia (to their credit less so since Howard got the boot from the voters), and New Zealand.

  16. Ettinger says:

    Just look at how many Europeans immigrate to the US from Europe vs. how many Americans immigrate to Europe.

  17. msetty says:

    Just look at how many Europeans immigrate to the US from Europe vs. how many Americans immigrate to Europe.

    Tiny numbers compared to those heading to the U.S. from the Third World or Asia. So?

  18. Ettinger says:

    It just speaks to the relative attractiveness of the two continents. If you actually look at the flow of talent then the equation is even more tilted towards from Europe to US.
    Also keep in mind that the UK is actually one of the less regulated countries in Europe. And the new world English countries of Canada, Australia and New Zealand even less regulated than the UK.

  19. MJ says:

    There is little reason to believe that political affiliation is the driving force behind these observed outcomes (political affiliation and home prices). This is probably just a case of spurious correlation.

  20. prk166 says:

    The idea that different values would lead to different decisions doesn’t seem so crazy. The thing is, I don’t believe those who support these expensive urban policies realize their true costs.

  21. the highwayman says:

    Even freeways are expensive, it’s just the current transport policy today is to white wash their costs.

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