Econ Extra Credit^™ with David Brancaccio

If the secret to success is introductory economics, let’s get successful together.

When "The Queen of Versailles" opens, the Siegel family has grown out of their 26,000 square foot home. 
 
“We are bursting out at the seams,” Jackie Siegel says, explaining why she’s building a 90,000 square foot mansion with her husband, David.  
 
Those numbers are massive, but Americans of more modest means are scaling up too. Even as household sizes have declined, the average home grew from 909 square feet in 1949 to 2,480 in 2021. (This interactive graphic shows how big homes are in your city or state compared to others.)  
 
But what does more space get you? Many assume that more space leads to happiness. The Organization for Economic Cooperation and Development, for example, measures the number of rooms per person as part of its indicator for quality of life. But there’s no direct relationship between more space and wellbeing, according to a British study.  
 
The U.S. Census Bureau has been asking Americans about satisfaction with their homes since 1984. When researcher Clément Bellet looked at the data, he found that even as home sizes grew, the level of satisfaction stayed relatively constant, even though individuals had more private space by the aughts than in the 1980s.  
 
Bellet found that prestige may be driving our desire for bigger homes, because house satisfaction was highly dependent on the size of other houses in the neighborhood. If people saw newer, larger homes being built nearby, their satisfaction with their own home fell. These same homeowners were also more likely to upgrade their home and take on debt to keep up with the Joneses.  
 
That’s why economists describe houses as “positional goods.” The more one person benefits from a positional good, the more others are harmed. 
 
“They determine our social status by effectively exhibiting our wealth and tastes,” writes housing researcher Chris Foye. “Even if a person’s living space is large enough to meet their basic needs, they may still feel a stigma (or pride) if it is smaller (or larger) than that of their neighbors, friends, or family.” 
 
So what do we do with that extra space? The Center on the Everyday Lives of Families at the University of California, Los Angeles, tracked 32 middle-class families over several years. Researchers found, for instance, that 68% of Family 11's time was spent either in the kitchen or in the family room. Their formal dining room was rarely used.

The UCLA researchers found many of the families were using the extra space to store stuff. Compared to any other society in global history, they said, contemporary Americans have the most possessions per household. It’s ironic that technology has reduced the need for stuff — think of all the things a single smartphone can do — yet Americans are still accumulating more and more.  

The bigger the home, the greater likelihood for wasted space, which, in the end, is wasted money. 
 
When asked what people waste their money on, the first thing that Nobel Prize winning economist Robert Shiller named was bigger homes.  
 
"People are still in a mode of thinking about houses that is kind of 19th century,” Shiller told the Wall Street Journal. “As we modernize, we don’t need all this space."

How to Watch "The Queen of Versailles"

“The Queen of Versailles” is available to stream on several platforms with a subscription, including Kanopy, Hoopla and Prime Video. It’s also available to stream for free with ads on YouTube, Pluto TV and Plex.

It is also available to rent or buy on several platforms.

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