Change: Do I Love It Or List It?

The Canadian Show “Love It or List It” has been very popular in the Lambert household for many years.  The show, which started in 2015, focuses on a couple struggling with what to do concerning their current house, such as “do we invest in the house” or “do we move to another house?”  The Show revolves around the drama of retrofitting/improving a house while at the same time the stress of looking for a new home.

It is common for one partner to be “all in” regarding staying in the current house, despite the costs and struggles, while the other seeks something different.  One partner argues the current home fails to meet their needs regarding family space, amenities,  or a number of different factors.  At this same time, the other spouse argues on the “value” of the house, including the family’s history there, proximity to the community (schools, friends, etc.). While the home improvement/home search plays out, the show’s two hosts (a designer and a real estate agent) engage in friendly banter about their own success in swaying the couple towards loving it or listing it.

After seeing many houses, the couple finally tour their own home, after the renovations are completed. Then they are presented with the appraisal of their own house. They are asked, after reviewing the appraisals, to either “love it (stay) or list it”? Generally, most people choose to “love it”, despite the best efforts of David Visentin, the person helping the couple evaluate new homes, choosing to stay after designer Hilary Farr has completed the renovations. (And I do enjoy David’s occasional glance into the camera, breaking the fourth wall.)

This reason for most couples to “love it” led me to think why so many people choose to stay, when initially, one of the partners found the house inadequate, pushing for a resolution to their “housing situation”.

My thoughts on why most people stay in their home:

  1. The house serves as a link to a broader community. Most of the couples appear to have been in the house for a significant period of time, meaning they have roots to the community. The familiarity of the neighborhood, the location to various social/recreation opportunities, etc., all suggest the couple would have to reconnect to a new community if they moved. There are costs for breaking these social ties. (I am reminded of the following quote from “Field of Dreams“: This is my most special place in all the world, Ray. Once a place touches you like this, the wind never blows so cold again. You feel for it, like it was your child.)
  2. There are couples who put in the funding for renovations. If they have been paying for the house, the renovations could generate a significant equity. For most people, their home equity can be seen as a “retirement nest egg”.
  3. There maybe the potential for dealing with an angry “Hillary”, who seems upset when someone questions her design efforts, which could create a perception of staying to avoid her displeasure.
  4. The couple, unable to make a decision previous to the arrival of Hillary and David, uses the exercise to determine their housing needs. David questions them concerning their needs/wants, seeking to find the “perfect house”. In many ways, people do not know what they want, but can express what they do not want. Sometimes we need others to help clarify our thoughts.

So, if one was to consider the same process of evaluating any change, one would see that change must be adopted through some matrix of at least one or more things:

  1. trade-off between the known for the unknown,
  2. understanding the value of choices,
  3. seeking the approval of others (either to reinforce identity or avoid conflict), or
  4. learning to communicate one’s wants/needs.

So, the next time you are considering a change, think about what factors are/may influence your decision. The answer may surprise you. (If this is not enough, one could easily add to this list by examining the various cognitive biases listed here. )

What Can Speculative Fiction Teach Us About Scarcity, Resources and Markets

I am a fan of speculative fiction (science fiction) and was surprised to consider how many of these stories contain an economic bent.  There are plenty of stories that include the adoption and use of science, but for many stories, there remains the use of science to advance society and create wealth (To boldly go where no one has gone before?) But why is economics so attuned with science fiction?

Economics is about the allocation of scarce resources.  In many ways, science fiction discusses scarcity, such as the lack of air (Total Recall), Land (Waterworld), Spice (Dune), Food (Soylent Green), or other resources.  In these, and other stories, the characters seek ways to collect, mine, create, or otherwise  acquire something of value.  Often these characters require the engagement with others to assist in the quest, a potential buyer, or some advisory that prevents either the collection or exchange of an item to occur.  (Which is one  of the reasons that markets feature in so many stories, such as from Valerian and the City of a Thousand Planets.  This markets provide a place for an exchange to occur, for no one is self-sufficient in an complex world.)  

Which leads to something else that lies at the heart of economics:  markets.  One can define a market as possessing three characteristics (although the Encyclopedia Britannica lists a few other items):

1.  A buyer,

2.  A seller, or

3.  A good or item to exchange between parties.

And one could add are few more caveats:

  • A medium for discussion (how do we discover information about the product and a price?)
  • A way to allocate geography (where is the product?)
  • A scarce resource that people value (is there a way to put a value on this product?)
  • An agreement regarding when the transaction occurs (how will we know when we reached a solution?)
  • Consent for the transaction to occur (are both parties agreeing to the outcome?).

If an exchange is/is not made, all parties agree to an outcome based on the what, the where and the when, that occurred.  As such, one could say the market is closed even if an agreement was not reached. (If one of these assumptions are not meet, while the exchange can occur, one would say that anything short of these tenants would be theft.) 

But even within the market and the assumptions are met, there are several stories that have an economic angle that drives some characters…

1. the potential power between the two parties (monopolies, competition).  The following story discusses how an electronic market is set up to handle resources in the Martian colony  (Escape Pod Martian Chronicles, Part 1 and Part 2).   

2. the potential for external observers to dictate a transaction (regulation),  Again, not all transactions are legal, or can be frowned upon, such as hauling children (Guardians of the Galaxy 2).

3. the presence of alternative goods/choices (opportunity costs), such as managing people as in the “The Evening, the Morning and the Night”.  

4. the timing of the final exchange (time value of money), the Restaurant at the End of Universe where compound interest pays for the final meal.  

5. determining a market price, such as in “Chivalry” by Neil Gaiman, where an elderly woman negotiates the value of the Holy Grail, read by Levar Burton,

6. the process of collecting resources and skills, such as in “The Starsmith”, where one travels across space and relearns how to craft metals.

7. Etc.

Not all science fiction stories have a strong economic tie, such as the Star Wars Episode IV: A New Beginning remains a retelling of the Hero’s Journey or the 1902 Journey to the Moon.  But there is enough stories that have an economic tie that there may always be a market exchange somewhere in the story. (Even Star Wars had a Cantina Bar where the search is on to hire a pilot!)

I am not alone in my assessment, based on the following article from the World Economic Forum.   So the next time you ride a spaceship, travel through time or battle an alien, you may meet rational parties (at least to themselves) seeking resources, living out your first lesson of “Economics 101”. 

How to not succeed as a Phd Candidate

I am working on my PhD disseration, and thought I would share a few thoughts on what not to do…

1. Do not follow the rules concerning your PhD Candidacy to the letter
   You should read and understand what is required.
2. Do not assume your professor can read your mind
   If you can’t communicate your ideas, no one will understand them
3. Do not communicate with your professor
   They are there to help you succeed
4. Do not write daily
   You may find this the ultimate labor
5. Do not read daily
   This should be a labor of love
6. Do not participate in academic, scholarly forums to engage with others
   Sharing with others helps you understand your own research perspective.
7. Do not forget that there are people who wish to help you succeed
   You have a lot of cheerleaders, not only academically, but with family and friends.  
8. Do not have any hard dates
   A goal without a deadline is but a wish…
9. Do not try to solve all the world’s problems
   My biggest challenge – focus on one point!!

I am sure I will be revising this list over time, but it’s a start!

Eating Chocolates and Performance Metrics

We have all seen or heard this quote from Peter Drucker.

The focus on performance is a byproduct of a data rich world.  Deploying “the internet of everything”, provides the ability to improve system performance at a greater degree of granularity  if we all can agree upon the desired outcome.

A fan of slapstick/physical comedy, I always enjoyed this skit. Lucille and Vivian are unable to keep up with their chocolate wrapping assignment.  They eventually “hide the evidence” that the system is failing, as their confidence turns to panic. (The woman manager actually created a perverse incentive, i.e., no unwrapped chocolates. To avoid being fired, they actually do a worse job than being truthful about their work, or the manager observing to see if they were preforming as expected.)

The manager saw the chocolates were gone. She was delighted, but did not understand the system’s real performance. One could argue that her measurement tools were weak, but her eyesight was sufficient to allow her to believe that no other testing was necessary, the objective was met, no unwrapped chocolates in the other room. Lucille and Vivian do not confront the manager. Their mouths are full of chocolates, thus agreeing to be overworked yet again.

So, when examining ways to manage performance measurements, industrial processing does a good job of discussing flow charts, etc., but it may not necessarily capture the ingenuity of the work bench! And this is where the second Drucker quote serves as a useful counterpoint.

Lessons In Mentorship From Peter Drucker - Credera

But there may be a better quote… “just remember  performance measures are like a box of chocolates.”

Forrest Gump Quotes About Running. QuotesGram

What If the Horseshoe Falls Off?

There is the old nursery rhyme about how a kingdom is lost because a horseshoe falls off.  The poem refers to paying attention to little things that can make a difference, as the casual relationship of minor things failing can evolve into major problems (the Space Shuttle Colombia is but one of many examples). While one could argue its importance on military logistics or other more mundane tasks (such as learning the basics when mastering any skill), the same logic could be applied to not only the development of data but to data applications.

In the age of “Big Data”, we see where more information can provide insights that were unavailable just five years ago. The use of Artificial Intelligence and Machine Learning will transform how we collect, manage and process data, providing insights that will assist researchers and decision makers. However, the casual relationships between collecting/using data with any unintended consequences remain.

For example, one could argue that I represent three people: a physical me who eats, sleeps and walks around, while there is a legal me, who signs legal documents and has financial interests. There is an emerging digital me, where I live and work in a virtual world. My information is collected, processed, and analyzed, as I become “a product” sold to others. In many ways, the data collected from millions of digital actions are creating better horseshoe nails for business, governments and others, but will this lead us to lose the kingdom of our individualism?