By BoLOBOOLNE payday loans

Economies of scale with Group Living

One of the advantages to group housing is that there are many opportunities to take advantage of economies of scale. That is, there are many required activities that scale non-linearly with the number of residents. A simple example is any activity which is required for the house but only requires a single person to take care of:

  • Hosting any kind of service person – plumber, electrician, cable, etc
  • Grocery shopping and cooking
  • Gardening
  • Dealing with house insurance
  • Maintenance such as painting, roofing or windows

The key here is that the amount of effort required to do this for a large house with say 2xN people is less than twice the amount of effort required to do this for a normal house with N people in it.  In some cases it will hardly require any more effort at all for a large house.  But even for something like waiting for the cable guy, the amount of effort required will probably increase slightly for a large house — because the large house will require somewhat more cable services than a small house would.  But generally, the bigger house is more efficient.  My simplified representation was “effort = tasks / people” which is reasonably accurate for a number of useful cases.

There are some ways that economics of scale can work against you.  Specifically with utility prices.  Utilities like water get more expensive the more you use, as a way to discourage people from using more water than they need.  This works against you when you have many people living in a single house which the city classifies as a “single family house” and charges penalizing prices when usage goes above what they consider reasonable for a single family.  Right now, I recognize this as a limitation that I’ll just deal with because the absolute cost is not very high.

Another factor that scales badly is relationships.  That is to say, with lots of people around, there are many relationships to be maintained.  Every additional person you bring into the house forms a relationship with every existing house member.  Each relationship has a reciprocal pair — I have one with you, and you have one with me.  So the number of relationships in a house with N people is N*(N-1).  (This assumes your housemates are sane enough to not pick fights with themselves.)  If any of these relationships sour, then there’s a problem which can make the whole house uncomfortable.  For this reason, it’s valuable to pick housemates who are low-drama.  This table numerically lists the number of opportunities for drama as a function of number of residents in the house:

Residents Opportunities for Drama
1 0
2 2
3 6
4 12
5 20
6 30
7 42
8 56
9 72
10 90

There’s another limiting factor in increasing the size of a house, which is decreased responsibility of ownership.  When a valuable object is owned by a single person or two people, they typically take very good care of it.  They know that if anything bad happens to it, they need to fix it, or deal with it being broken.  But as the number of owners increases, the sense of ownership and responsibility that comes with it diminishes.  At the extreme end of this are publicly owned goods like subways or parks.  As your house gets bigger, people will care less about taking care of it.  There are aspects of our house where we feel that we are bumping up against this limit practically speaking, and if we took more residents on, we fear the quality of life would degrade.

Comments are closed.