The Inefficient Housing Market At Holy Cross

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.

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3 thoughts on “The Inefficient Housing Market At Holy Cross

  1. richardbarber68

    Coming from someone who has had terrible housing times in the past two years, I’d like to still respectfully disagree with your argument. I understand your point in trying to apply the real housing market to the Holy Cross model of housing, however, this would create a privileged system for Holy Cross where as the lottery system was made in order to NOT privilege students. The use of extracurricular hours and GPA points would only privilege certain students, such as athletes or those who use their time solely for academics. This system will also divide the campus just as low-income areas are divided from upper-middle class areas in the US. I do understand that privilege is a part of the real world and the housing market in the real world is efficient towards those who have the money to pay, but Holy Cross is not the real world. Therefore, Holy Cross is a place that embraces diversity and trying to modify a system that pursues this mission is harmful to the Holy Cross experience and community as a whole.

    Reply
    1. MattReeves17

      This post provides a very interesting viewpoint on the housing market at Holy Cross. As someone who has been affected by the lottery system in a negative way multiple times, I would not be opposed to the school trying a different system of housing selection. However, as Richard said, many of the possibilities available would still provide an unequal system, such as charging more for certain dorms, or allowing students with higher GPA’s to have preference. Many things aside from effort may affect one’s GPA. The dining dollars idea is an interesting one; however, it would still present inequality for students with less money as they may need more dining dollars to pay for food. Therefore, while the outcomes of the lottery may not always be favorable, it appears to be the only method that provides an equal chance for all.

      Reply
  2. Victor Matheson

    Nice post and interesting ideas. I feel compelled to note that the 2012 Nobel Prize in Economics was awarded to Alvin Roth for his work in markets like this. His ideas led to significant improvements in how medical school residencies and donor organs were distributed.

    Reply

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