Photo: Flickr/Lachlan Hardy
People are irrational when they make the biggest purchases of their lives: houses and cars.They’re more likely to pay up for a house with central air or buy a convertible in the summertime, according to a recent study. And in the winter, people are more likely to value a sturdy vehicle with a 4-wheel drive should it snow, according to the study by Meghan Busse and Devin Pope at the National Bureau for Economic Research.
They found that people disregard utilitarianism (what would be the best choice overall) and instead go for what’s best in the moment:
We find that the choice to purchase a convertible, a 4-wheel drive, or a vehicle that is black in colour is highly dependent on the weather at the time of purchase in a way that is inconsistent with classical utility theory. Similarly, we find that the hedonic value that a swimming pool and that central air add to a house is higher when the house goes under contract in the summertime compared to the wintertime.
The reason is the same as why people buy more at the grocery when they’re hungry, the researchers say. It’s impossible for the brain to turn off what it wants in that moment.
So don’t go to look at swimming pools on a hot day–chances are you’ll cave.
Here’s a graph showing the value of houses with swimming pools by season: