Logical Reasoning

PT143 · S3 · Q5 Home ownership is a sign of

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Home ownership is a sign of economic prosperity.

Given that ...

Home ownership is a sign of economic prosperity.

How can it be that ...

Across various regions of Europe and North America, high levels of home ownership correspond with high levels of unemployment.

Evaluate

The paradox here seems to be,

And yet, in areas where lots of people own homes, lots of people are unemployed.

Maybe the homeowners are not the same as the unemployed. In other words, maybe in these areas 80% of people own homes (which is higher than average) and 15% of people are unemployed (which is also higher than average). But those two categories don't necessarily have to overlap. We would just need a story that allows us to explain how 80% of the residents are making enough money to buy homes but 15% of them can't even find a job.

Goal

We need a way to understand how cities with high unemployment could also have high rates of people who own homes.

5.

Which one of the following, if true, helps to resolve the apparent conflict described above?

  1. Correct

    Home ownership makes it more

    Why this is right

    A lot of times on Paradox questions, to break out of the paradox's confusion and into the enlightenment of the answer, we have to do a gestalt shift (think about it a very different way). Our paradox was: If there's a high level of unemployment, then people don't have jobs, so they don't have money, so they shouldn't be able to afford a house. How is it that these communities have high levels of home ownership? But that's because we're thinking 1st came the unemployed 2nd came buying the house If we reverse that chronology, then this answer can help us make sense of things. 1st came buying the house (the people in town had jobs at that point). Let's say we're in West Virginia during the glory days of coal mining. People had jobs, so they had money, so they bought homes, so there is a really high rate of home ownership. But then .... coal mines get shut down. Most of the good local jobs disappear. The town is not an economic wasteland. The people who rent month-to-month have the freedom to pack up and say, "I'm moving to a different area with better job opportunities". The people who are stuck in 30 year mortgages can't just uproot like that. They have to stay and stick it out in an economically depressed area. So high levels of home ownership go hand-in-hand with high levels of unemployment because, "the only reason you'd stay in an area with high levels of unemployment is if you were stuck living there because you bought a home and planted your roots".

    Skill tested: Paradox · how this choice captures the argument's function is the move to repeat next time.

    85% picked this

  2. Over the last few decades

    Deepens Paradox

    This goes in the opposite direction from what we want. This describes jobs heading towards homeowners. We need a story where there are homeowners and there aren't jobs, because we're trying to reconcile home ownership with high levels of local unemployment.

    2% picked this

  3. The correspondence between high levels

    Reiterates Paradox

    This just adds heft to the underlying correlation: "I'm telling you, these two things that are confusingly associated with each other are really associated with each other across lots of different countries and social systems." "This counterintuitive pattern happens in tons of places!" Okay, but we're no closer to explaining why this counterintuitive happens. This is just reiterating that it happens.

    4% picked this

  4. People who own homes are

    Deepens Paradox

    This goes in the opposite direction from what we want. This homeowners having an advantage when it comes to learning about local jobs. We need a story where there are homeowners and there aren't jobs, because we're trying to reconcile home ownership with high levels of local unemployment.

    1% picked this

  5. People are more likely to

    Explains Background

    This doesn't have anything to do with explaining the surprise (the association between home ownership and unemployment). This just seems to help explain the background fact, that home ownership is associated with economic prosperity.

    7% picked this

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