Are models that assume linear utility useful?

I just saw a paper on how the desire of households to match with particular houses could explain housing market dynamics--in particular why house prices are more volatile than incomes.

Performing such an exercise is very difficult, and requires simplifying assumptions.  One of the most important simplifying assumptions in the paper is that utility is linear--that people value their last unit of consumption just as much as their first.  This assumption is clearly wrong--we know that marginal utility diminishes in consumption.  Yet the assumption was necessary to make the model tractable.

So do we know more about the world because of the model or not?  I really don't know.

Celebrating the Women in Our Lives

Hi friends! I hope your weekend was filled with fun summery things.  Today, I'm excited to share a "female friendly" post to celebrate the women in our lives who've helped shape the people we are today.  When I was asked to share a word of wisdom from an influential female in my life I knew just who to pick- my superhuman Grandma Nola.  

Grandma Nola is a force to be reckoned with, feisty with firey red hair, a beautiful spirit for truly helping other people (I'm talking sponsoring entire families not related to her), and cooks the best-tasting homemade meals with love.  She grew up on a farm and can sew with the best of em, and will find a solution to any medical problem you're having after researching all on her own.  She is fiercely independent and always encourages women to get an education and live life on their own terms.  She's Facebook, Internet, and email savvy too! She also happens to read this blog everyday so I know she'll get a kick out of this post. 

    me // mom // grandma Nola (2004- law school graduation)                        baby brother // grandma Nola 

The words of wisdom that Grandma Nola instilled in me from a very young age are

As women especially, we can easily forget this simple sentiment as we go about our lives raising kids, keeping house, and taking care of everyone BUT us or put ourselves way at the bottom of our "lists".  My Grandma reminds me that it's important, essential really, to take care of YOU.  It's not selfish to call a YOU-time out and get some much needed rest or give yourself permission to let others give a helping hand.  Since we don't live close, I still receive handwritten letters that are always signed, "take care of you" and I'll always remember that advice. 

In the comments section, I'd love to hear the about an influential woman in your life and the words of wisdom she's shared with you. 

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If in 1987 you bought the average house in the average place...

…you have about broken even relative to the consumer price index. The Case-Shiller National Index for March 1987 was 62.03; for March 2013, it was 136.70.  The Consumer Price Index in March 1987 was 112.7; in March 2013 it was 232.77.  So the Case-Shiller Index has risen by  120.4 percent in 26 years; the CPI has risen by 106.5 percent.  So in inflation adjusted terms, the average house in the average place has risen by 13 percent over the past 26 years, or a little less than half of one percent per year.

[At the suggestion of Austin Kelly, I looked to see what would happen if I used the unit-weighted FHFA index instead of the value-weighted Case-Shiller index.  I found that based on FHFA, real house prices rose by 11 percent since 1991 (the first year for which data are available), or a little less than .5 percent per year.  So even though the index is different, the result is the same.]

Reposted from Forbes.

Blogging & Social Media

In just a couple of months, Cassie (Hi Sugarplum), Courtney (A Thoughtful Place), and Carmel (Our Fifth House) will be talking about blogging and Social Media at the Haven blog conference.  As we prepare, I wanted to reach out to YOU (who better to ask?!) and find out what forms of social media you like best (and worst) and what questions you have about how to use social media.

If you've been reading my blog for any length of time, you know I love Pinterest and Instagram (@honeywerehome), have started to become more active on Facebook, but Twitter kinda overwhelms me.   What about you?  If you are a reader or blogger, I'd love to hear from you! I just recently figured out how to link my Twitter and FB accounts, but I like to keep Pinterest separate for fear of bombarding FB/Twitter with my many daily pins!  Because I really enjoy Pinterest and Instagram, I'm most active there but I wonder if any of you are really reading tweets/tweeting.  I feel like so many people are on Twitter that my tweets would just get "lost" in feed- does that make sense?  

someecards

Tell me what you think in the comments if you get a chance. 

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Could someone explain the market failure that protecting car dealerships solves?

The Wall Street Journal has a good story today about how car dealerships are (successfully) lobbying legislatures to ban Tesla Motors from marketing their cars directly to consumers.  GOP legislators, who get the willies about regulation that actually solves real problems, are on board with supporting protectionist policies for auto dealerships.

Does anyone really think that the industrial organization of the automobile retail industry works well?  My family buys a car every five years or so, and our experience is that no one tries to exploit asymmetric information like auto dealers.  I have lots of reasons to believe that our experiences are not unique.

What amazes me is that even in the age of the internet, when one can use sites like Edmunds to figure out what to pay for a car, dealers start out by assuming that the consumer is stupid, hope they get an absurdly marked up price, and only get reasonable when they find out their customer actually knows something.

Elon Musk is a visionary in many ways.  With the Tesla, he might make two important contributions--he might free  from petroleum, and he might free us from car dealers.

Organizing & Cleaning Tips from the I Heart Organizing Team

Thank you so much for the kind words on how James' book nook turned out!  I finally got a chance to see what everyone else came up with and I must say there are some pretty lucky kids out there with very creative mamas!  You can vote daily until June 23, 2013 and the winning blogger gets to give one of her readers a $500 gift card to Pottery Barn!  

VOTE HERE!

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If you're looking for answers to some of your most asked organizing/cleaning questions head on over to I Heart Organizing to see the I Heart Team's Answers.  We tackled everything from our favorite organizing products, how we organize our kid's art supplies, our organizing/cleaning routine (including laundry, and counter clutter)!

Photo Credit // I Heart Organizing Contributors

p.s. working on the blog's technical issues today! :/

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Pottery Barn Kids & PBS Kids Reading Nook Challenge (Vote to Win $500 to Pottery Barn)

Hi friends! As a huge fan of Pottery Barn Kids and PBS Kids, I was delighted to join in a Reading Nook challenge where I was asked to create an inviting kid-friendly space in my home with Pottery Barn Kids goodies.  Five other bloggers are participating also and YOU get to vote on the Book Nook you like best.  The blogger who created the winning space will get to give one of her readers a $500 gift card to Pottery Barn.  I hope y'all like what I've created and that one of YOU wins the gift card!  You can cast your vote on Pottery Barn's new blog, Building Blocks.



I found lots of inspiration for my design via Pinterest and created an inspiration board you can find HERE.  The products I chose to work with are pictured below:

Canopy * Bean Bag * Bookcase * Rug * Lamp * Galvanized Magnetic Board * Books * Dalmatian Bookend * Glow in the Dark Star Decals

You might remember that, just before the challenge began, James' room looked like this (after clearing out most of the furniture):

And after incorporating the items from Pottery Barn Kids, he now has a perfect little reading nook to call his own.  

The inspiration for the reading nook began with the blue and white stripe Rugby Play Tent Canopy.  Not only is it a super-cool place for a kid to hide away for some reading time, it makes a bold statement in the room.  It's made of durable polyester and is really sturdy.  We hung it from the ceiling with a small hook.  

A Dr. Seuss quote fits well with the space and is framed just outside the canopy.  I simply printed it from my computer.  Instant, inexpensive art! 

For cozy seating, inside the canopy is the Red Madras Anywhere Beanbag.  James is about 3 feet tall and fits this chair perfectly with room to grow.  The Chenille Jute Stripe Border Rug ties it all together and is really soft.

I added some pieces from our own house to the nook as well.  We are fortunate to have an old (vintage??) red wagon that belonged to James' dad as a kid that is still in pretty good shape for being over 30 years old. After a good washing, it doubles really well as added book storage.  

The big star bucket holds extra pillows and blankets for super cozy-time inside the canopy.  

I liked how the star bucket mimicked the awesome glow-in-the-dark star decals we put on the ceiling.  They really do light up the ceiling like the night sky when the lights are out!

Opposite the canopy is the Pottery Barn Cameron bookcase in white.  I'm so pleased with the quality of this furniture- it has a sold wood frame and was easily assembled in about 20 minutes.  I like to keep books as well as colorful decorative objects in the bookcase for added visual interest. 

On display is part of James' favorite train set from his Great Grandma on top along with the Solid Task lamp in red.  

The bookcase holds lots of books and I included a wire basket that can easily corral the smaller board books.  Making a label that James can "read" was easy with computer clip art and a laminating machine.  It also makes clean up easy since James knows exactly where the small books belong.

I adore this Dalmatian bookend.  It's surprisingly solid and keeps the books upright. So cute!

The Galvanized Magnetic boards are perfect for showcasing James' current art projects and I love how doubling them up increases the impact in the room.  The "GROW" sign is meant for a garden, but I thought it was completely cute and appropriate for a child's room.  

As you can see, James loves his little nook and "reads" in it everyday.  He even watches his PBS Kids shows on the iPad in there. We especially love Super Why and I swear it has given him a head start on learning to read.  I hear the catchy ABC song in my head as I type . . . 

Now for the fun part, YOU get to vote on which blogger's Book Nook you like best.  The winning blogger will be giving away a $500 Pottery Barn gift card to one of her readers! You can vote once a day until June 23, 2013.  Thanks! :)

VOTE HERE!