Every year, students apply for on-campus housing and parking. Busy praying that they’ll be granted a place to sleep and a patch of asphalt where their car will be keyed less, they don’t think twice about it. This is the question they should be asking: Why on Earth is the school allocating resources by lottery, one of the least efficient systems imaginable?
The party line on the matter is a cop-out. There aren’t enough spots to go around, I’m told, so they’re given randomly. Let’s crack open the old economics textbook. Here’s a test question: The demand for something outstrips the supply of that thing. Do you (a) let the price rise to an equilibrium where the number of willing buyers equals the number of products, or (b) throw everyone’s name into a Soviet-style lottery and hope for the best?
Bewildered, I asked the closest thing I have to a rigorous, even-handed think tank: the UCSB LiveJournal community. While some were similarly confused, others felt attacked: By observing flagrant disregard for the laws of supply and demand, I was, naturally, condemning the common Gaucho, whose parents scrimp and save to realize their dream of a member of their family – at least the ones who have escaped the old country – attending college. Who was I to deny little Dmitri a higher education?
Ostensibly, the lotteries are designed to level the playing field, giving everyone an equal shot at the school’s resources by holding prices within the range of affordability for most everyone, little Dmitri included. However, there is one major point that this line of reasoning overlooks: Under the lottery, you are not buying the same goods and/or service that you would be otherwise. Not even close.
When the market sets the price of an item, I know exactly how much money I’ll need to get one. If this means bread costs three dollars a loaf, I can rest assured that, even if I want to binge on some Wonder Bread at six in the morning, three simoleons is all it will take. If bread were sold via UCSB’s playing-field-leveling lottery system, I would only pay a dollar fifty. Swell, except that I may not get any bread because my application is late; I’ll have to share the bread I do get with a stranger, and it’s a moot point since the bread office is closed.
Housing and parking are no different. The lottery precludes paying the amount that a dorm room is worth and getting whatever type of room you want whenever you want it. If I don’t happen to get around to it until last minute – probably because I was up all night eating Wonder Bread – the Housing Office will tell me to take a hike because the lottery deadline has passed. I have to make my purchases at their convenience with a chance that I won’t get anything at all. For a lower price, I’m receiving – assuming I do receive it – a worse product.
Sure, you’re paying for theoretical housing and you have to do it within a certain window of time, but… you’re paying less! A cold comfort, but, regardless, dismantling the lottery is not readily embraced. Some LiveJournal respondents insisted that to do so would be tantamount to handing all of the dorm and car space over to – heaven forbid – the rich, since, they insisted, they would be the only ones able to afford them.
The argument still teeters on a shaky, Del Playa-like foundation. To maximize revenue, the university will rent all of their parking spaces and dorm rooms; if only the rich had access to them, there would be many spots left empty. Contrary to popular belief, the wealthy are not a plurality of the student body, let alone the majority. The market would not push prices past the point where commodities stop selling.
In the name of so-called equality and fairness, the lotteries are keeping resources away from those who value them most, an odd consequence to allow in an institution where economics is taught. Nevertheless, irrational disdain of the rich and wrongheaded egalitarianism appear to be the orders of the day. So put me on the waiting list for some theoretical housing, comrade. Which way to the bread office?
Colin Marshall is a junior business economics and communication major at UCSB.