It’s time! Housing selection for next year has started at Holy Cross this past week. You may not realize it, but at Holy Cross we have a housing market, just like the U.S. economy. Our housing market here can serve as a model for the larger U.S housing market for the real world. But, strangely enough, we do not allocate housing resources in the same way. Instead we use an inefficient lottery system that leaves us with an inefficient allocation of resources.
Students can end up living in essentially random dorms, in a random room, with random neighbors, depending on the randomly assigned time they receive. What Holy Cross hasn’t realized, is that there are some dorms with a greater demand than others, just like different neighborhoods or cities in the real U.S housing market. In order to efficiently allocate rooming, Holy Cross could use past housing data, or current student opinion, to estimate the demand for each dorm. What you would end up with is a variety of different aggregate demand curves, each for an individual dorm. Because there are a fixed number of rooms, we would be looking at a vertical aggregate supply curve. Therefore, for each dorm, Holy Cross could charge a set price for each dorm, which would produce an efficient allocation of rooming. Those willing and able to pay for a particular dorm would, and those not willing or unable, would not.
Now, you don’t have to charge Holy Cross students “real” money in order to accomplish this. This process could be based on something such as dining dollars, GPA points, extra curricular activity hours, or a combination of all three. Students who have an individual demand for a “better” dorm would save their dining dollars, be more motivated academically, or spend more time getting involved. But instead, Holy Cross has been leaving this process, which is essentially a small-scale version of the real world housing market, to an inefficient lottery system. Students who are willing to “pay” to live in a better dorm, are left in a different dorm, while those unwilling to “pay” for this better dorm have taken their spot. But, this is the system we have selected.
May the odds be in your favor.