Yale Economist James Choi Analyzes Popular Financial Advice : Planet Money This episode was first released as a bonus episode for Planet Money+ listeners last month. We're sharing it today for all listeners. To hear more episodes like this one and support NPR in the process, sign up for Planet Money+ at plus.npr.org.

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"Save aggressively for retirement when you're young." "The stock market is a sure-fire long-term bet." "Fixed-rate mortgages are better than adjustable-rate mortgages." Popular financial advice like this appears in all kinds of books by financial thinkfluencers. But how does that advice stack up against more traditional economic thinking?

That's the question Yale economist James Choi set out to answer in a paper called Popular Personal Financial Advice Versus The Professors. In this interview, he tells Greg Rosalsky what he found. Their talk marks another edition of Behind The Newsletter, in which Greg shares conversations with policy makers and economists who appear in the Planet Money newsletter.

Subscribe to the newsletter at https://www.janepoynter.com/newsletter/money.

Read more about James Choi's paper here: https://www.janepoynter.com/sections/money/2022/09/06/1120583353/money-management-budgeting-tips

One economist's take on popular advice for saving, borrowing, and spending

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SYLVIE DOUGLIS, BYLINE: This is PLANET MONEY from NPR.

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KENNY MALONE, HOST:

Hey, Kenny Malone here. We are off the rest of this week for the Thanksgiving holiday, but we wanted to give you something to listen to today. Maybe you've got a long drive over the holidays. Maybe you've eaten too much turkey, feel a little sleepy. Well, we have some pretty stimulating economics content here for you especially if you have been curious about what our PLANET MONEY+ bonus episodes sounds like. This is one of those episodes, one that we released for PLANET MONEY+ subscribers back in October. And now we are excited to give everyone a chance to hear it.

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So listen, if you are already subscribing to PLANET MONEY+, thank you. We are thankful for you this Thanksgiving. And look, if you haven't already subscribed, there is a way to do that. Just look down in the episode description there. There should be a little link. With that, here you go, a bonus episode of the show previously available just to PLANET MONEY+ supporters now here for everybody. Enjoy.

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MALONE: Hello. I'm Kenny Malone.

GREG ROSALSKY: And I'm Greg Rosalsky.

MALONE: Today, Greg, it is time for something that we have cleverly named Behind The Newsletter, inspired, of course, by VH1's "Behind The Music."

ROSALSKY: Yeah.

MALONE: But with way less drama and way more economics learning.

ROSALSKY: Right. So every week, I write PLANET MONEY's newsletter. I often interview, like, leading economists and policymakers. Then, you get to hear some of those interviews here as sort of, like, a perk for your subscription.

MALONE: Yeah. And today, we're going to share an interview with you, dear listeners, that Greg did with economist James Choi. You want to set this up for us, Greg?

ROSALSKY: Yeah. So James Choi is an economist at Yale. And earlier this year, he came out with this working paper that was published at the National Bureau of Economic Research. And it's called "Popular Personal Financial Advice Versus The Professors." Basically, he looked at 50 of the most popular personal finance books out there, books with advice on saving for retirement, investing, buying a house, all that stuff. And he sees how their advice squares with more traditional economic thinking.

MALONE: OK, this is good. This is the metastudy study of, like, what - these are books that are literally, like, "Personal Finance For Dummies," like a metastudy of that stuff.

ROSALSKY: Exactly. That was one of the 50 books. Others, you might have heard of like Dave Ramsey's "Total Money Makeover" (ph), Tony Robbins' "Money Master The Game," Suzy Orman, "9 Steps To Financial Freedom" (ph) - books by people I like to call the financial thinkfluencers (ph).

MALONE: Thinkfluencers, the portmanteau of thinking and influencing? Is that what that is?

ROSALSKY: Yeah. I don't know. Whatever. Well, I - you know what, Kenny?

MALONE: Well, let's go with it. Let's go with it.

ROSALSKY: I consider you, like, a podcast thinkfluencer.

MALONE: Oh, that's great. Thank you. Thank you. OK. So we've got James Choi, economist, reading all of these thinkfluencer books. And so he's kind of trying to be a referee, I suppose - right? - and say things like, this tip, it's in a lot of these books. It makes sense from an economist's perspective. This other one, not so much. That's the game here.

ROSALSKY: Kind of, yeah. Sometimes, he says, yeah, that makes sense, according to traditional economic theory. Sometimes, he's like, that doesn't. But sometimes, he says it depends because the popular books, he thinks, offer advice that might make a little bit more sense from a behavioral economics' perspective. So Choi, we should say, is a behavioral economist, meaning he believes that people don't always act rationally when it comes to money. Whereas more traditional economic theory paints humans as kind of these hyperrational, disciplined creatures who are always acting in their own self-interest. And sometimes, when you're talking about financial advice, it breaks along those lines. Are people fundamentally rational about money? Or are they not?

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MALONE: And so without further ado, here is Yale economist James Choi Zooming with Greg. And, of course, you can read more about all of this in Greg's newsletter at the link in our episode notes.

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ROSALSKY: Before we kind of get into, like, the nuts and bolts of it, like, why don't we just start with, like, the backstory? Like, what inspired you to do this research?

JAMES CHOI: A few years ago, I started teaching a personal finance course. And in putting the course together, I was looking for some texts to assign to the class. And that caused me to look at some of these popular personal finance books. And as I was reading a few of these books, it struck me that these people were giving some advice that was maybe quite different from how we economists think about this. And it really was kind of inspired by my teaching.

ROSALSKY: So if I have this right, you read through 50 of these popular books about personal finance?

CHOI: I will confess I did not read every single word.

ROSALSKY: (Laughter).

CHOI: Upfront, I had some excellent research assistants do the groundwork.

ROSALSKY: OK.

CHOI: But I did end up skimming every single page of all these books, at least skimming, and then reading closely some of the sections (ph).

ROSALSKY: So, you know, let's go through some of your big findings. So let's just talk about advice regarding saving. Like, how does traditional economics differ from what popular authors prescribe when it comes to, you know, how we should spend, borrow and save over the course of our lifetimes?

CHOI: Traditional economics starts from the perspective that we want to optimize your consumption path over time. Given the uncertain amount of resources in your life, what traditional economics says is you want to smooth that consumption over time because the hundredth bite of ice cream is less pleasurable than the 99th bite, which is less pleasurable than the 98th bite, and so on and so forth.

And so what life cycle hypothesis theory says is that you should have zero, negative or at least very low savings rates when you're young. And then, in midlife, you should be a supersaver. You should really be saving a lot of money because that's when your life - when your earnings are especially high. And then, when you are in your 60s and 70s and beyond, you should have a negative savings rate because at that point, you have a relatively low income.

ROSALSKY: And so - and to convert that into, like, something, it's like - for example, like, one advice for that could be, like, you know, let's say you're, like, going to a good school. You expect to get a good career. It might make sense, actually, to, like, go ahead. Go out to dinner. Accumulate some debt. And that might be, like, OK because you're basically borrowing from your future self, who's going to be much richer. And so enjoy a little bit, you know? Like, maybe don't scrimp as much.

CHOI: Absolutely. I tell my MBA students that you, of all people, should feel the least amount of guilt of having credit card debt because your income is fairly low right now. But it will very predictably be fairly high in the very near future. So it's OK if you, you know, rack up some credit card debt right now. But you probably want to be pretty expeditious in paying it off once you have a job full time.

ROSALSKY: So what does the popular advice say with these 50 books?

CHOI: Popular authors tend to advise you to smooth your savings rates rather than smoothing your consumption. They say that you should be saving a consistent percentage of your income kind of throughout your life. So even in your 20s, when your income is low, they say you should be saving 10- to 15% of that to establish a discipline of saving. And they're also very big on the power of compound interest. So they say, if you start saving in your 20s, then that's going to grow to, you know, X millions of dollars once you retire, so it's important to get a head start.

But economic models take that into account. But even after taking that into account, the economic model would say, well, your savings rate might optimally be zero or negative when you're young because it's just so valuable for you to be able to consume at a reasonably high level when you're young whereas the popular authors generally say compound interest means that you should be saving a positive amount at all times.

ROSALSKY: I mean, this is how I think. Like, so, for example, like, I'm a mountain biker. And my body is, like, younger now, you know? Like, not so young, but, like, I can mountain bike now. And I'm not going to be able to mountain bike as hardcore when I'm in my 50s, 60s or 70s. So I should probably spend and buy my mountain bike now and enjoy it. Wait, so it seems like from my read of how you've answered this and your advice to the MBA students, it seems like Point 1 for the traditional economics school. Am I wrong?

CHOI: I'm actually agnostic about it. I mean, it's absolutely true that in economics speak, marginal utility diminishes. So the value of an extra dollar of spending is pretty high when you're spending a low amount and not so high when you're spending a lot.

ROSALSKY: In other words, you get more bang for your buck, more pleasure for your buck, at these low levels. And maybe increasing your spending a little bit in your 20s actually is going to boost your lifetime total happiness.

CHOI: Yeah. That being said, I do think that there is something to this notion of being disciplined and learning to live beneath your means and that mentality and this whole theory from Aristotle that you build virtues by acting in a certain way, and you change your character by acting in a certain way. Certainly, as I look at my own life, when I was a Ph.D. student and had a very low income, I didn't take on debt. In fact, I saved a little bit of money over my Ph.D. years. And it didn't feel like it was a deprivation because I - I was low income. Everybody I hung out with was low income. We were students. And it was fine. And for me, personally, the jury is out...

ROSALSKY: The jury is out.

CHOI: ...On what the good life really looks like.

ROSALSKY: OK. Now, let's talk about mental accounting. What is it? What does traditional economics say about it? And how does the popular literature differ?

CHOI: Mental accounting is the practice of breaking up your wealth into different little buckets and saying this money is the money going to gasoline. This money is the money for the down payment. This money is the money for the Hawaii vacation. And at least in a more extreme version of mental accounting, you cannot use the money that you're saving for your Hawaii vacation to save up for the down payment and just apply to the down payment. And so these rigid buckets can have a substantial effect upon the path and the composition of your spending. Economic theory would say that a dollar is a dollar is a dollar. And so it just doesn't make sense to have these rigid boundaries within your wealth portfolio that are kind of separating money that is used for one purpose versus the other.

ROSALSKY: And there has been some empirical work on this. So I know Richard Thaler has done things. And am I right to think that the economic evidence or the modern empirical evidence, I should say, suggests that mental accounting is actually, like, an effective thing?

CHOI: I don't know if it's an effective thing. I think that there is evidence that people engage in it. But I do think that there is some value in mental accounting because it just makes a whole bunch of financial calculations easier. I want to go to Hawaii, and so I want to make sure that I have enough money to pay for that trip. Or I'm going to get married next year. It is really valuable for me to use money next year because hopefully a wedding is something that only happens once in your life, and so I kind of want a blowout party. And yeah, it just helps me to know how much I need to save today in order to have that blowout party next year.

Economists are not very good about modeling those types of occasions where spending money is especially valuable - so the wedding, being single and in your 20s in Manhattan - occasions where kind of the value of an extra dollar spent is especially high. And so that's where you get back to this consumption or expenditure smoothing where economic theory would say, well, you kind of want to spend about the same amount of money every year. But, hey, like, actually in the year that I get married, it is optimal for me to be spending a lot more than in the year before and the year after I get married. And so mental accounting can actually help people calculate - how much money do I actually need to be saving and spending in those adjacent years?

ROSALSKY: So if I'm reading your tone in what you're saying here, it seems like - and not all popular books do this. I think you find there's something like 13 books or something that recommend this - so it seems like a point potentially towards the popular literature here, at least the - versus traditional economics?

CHOI: I think so, yes.

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ROSALSKY: So next up is - and it's something - I have actually never heard of this phrase. So let's talk about something you called wealthy hand-to-mouth. What does that mean and how does the advice differ here?

CHOI: Wealthy hand-to-mouth is something that is a term that economists made up. Ordinary people would call it something like house rich, cash poor. So you have an enormous house. You're really, really stretching to pay the mortgage, and their checking account balance is hovering around zero at the end of the pay cycle. So a lot of American households are wealthy hand-to-mouth or house rich, cash poor. And the question is, why? It turns out that you can rationalize this behavior. It can be justifiable if the financial returns to owning this illiquid asset like a house is extremely high.

And so then it's worth it to really put as much money into this housing investment as you can, even though it causes a lot of bumps in your life outside of the house because you're constantly running out of money in your checking account. So what I was looking for in the popular books was to see, do these popular authors say that the financial returns to owning a house are so fantastic that you should maybe be house rich, cash poor? And basically, I found that, no, none of the popular authors recommend that you should be house rich, cash poor.

ROSALSKY: In other words, like, you shouldn't buy a house that you can't really afford without, like, some buffer.

CHOI: Yeah. So if you end up owning a house and that home ownership and the down payment and the mortgage payments make it so that you don't have any kind of emergency savings buffer, then that's probably a mistake that you're making.

ROSALSKY: And there seems to be agreement then between both traditional economics and the popular advice, which is, like, don't buy more house than you can afford.

CHOI: I guess there's a little bit of a debate going on in traditional economics as to whether this is a mistake or not. The older, really traditional economics would say that this is a mistake. Kind of the newer, traditional economics would say, well, there might be good reasons for people to do this because financial returns to owning a house, to owning these illiquid assets is really high. So it makes it worthwhile. And there's kind of this middle crowd that says, well, maybe it's not a mistake because there's these fantastic returns that people are getting on their houses.

ROSALSKY: OK. Let's go on to the next one. So this is something I always hear about - asset allocation. I think it's something that really matters to people. And I think there's a common - I don't know if this comes from the popular books. But there's a common one, which is take hundred, take your age, minus it. That's the percentage you should be in stocks. And so as you get older, you're getting less and less in stocks. But, like, what does economics say about this? What - yeah. Unpack this for us. How do these different schools of thought think about where we should be putting our money?

CHOI: I think qualitatively, the popular advice and the economic theory end up in similar places but for fairly different reasons. The popular belief is that the stock market is kind of guaranteed to go up if you just hold on to it for long enough. Now, this is just not true. And you can see it in Japan or Italy. In Japan, the Nikkei still has not recovered to the level it was in 1989. So it is not true that stocks are always going to win over the long run. Bad things can happen.

Now, it happens to be true that, historically, the U.S. stock market has had a fantastic century. So the U.S. stock market, we've gotten lucky, and we have done very well. But there's no guarantee that the U.S. stock market couldn't have a lost decade or even a lost 50 years. We just don't know. And so there are risks to investing in the stock market that are very real even if you have a very long holding period. So...

ROSALSKY: That's interesting. I feel like that bucks conventional wisdom. I feel like you just said something that I even ascribe, like, to, that, like, you know, you look at, over the long run, the S&P 500, in real terms - goes up 7% every year for, like, as long as the S&P, you know, has been a thing. And you're saying that, like, you know, like, that might actually not happen. And I didn't realize this about Japan. But maybe somebody would counter and say, well, '89 is not that long ago. That's not the long term.

CHOI: Well, that is 30 years.

ROSALSKY: (Laughter) That's true.

CHOI: Not too many 30-year chunks of time in a life span.

ROSALSKY: Yeah, that's true. Wow. OK. So continue 'cause that was very interesting.

CHOI: Yeah. So the reason that these popular authors recommend these stock allocations that decrease with age is they're really thinking about the investment horizon. And they think that the longer you invest in the stock market, the safer it is. And so when you're young, you have a long time until retirement, so the stock market is relatively safe. As you get older, the stock market becomes less safe because your investment horizon gets shorter, and so you should be cutting back on stocks.

Now, economic theory would say, yeah, there's something to that. But what is a more robust reason to become more conservative in your financial portfolio asset allocation over time is that when you're young, you have a lot of wage payments still left in your future. And these are relatively safe compared to the stock market. And that means that you can take a lot of risks with your financial portfolio because you have this huge backup asset, which is your future wage income.

And if you have a really bad run in your financial portfolio, you can work for a bit longer. You could take a side hustle. There are all sorts of ways in which your future labor capacity provides a cushion for the risks that you take in your financial portfolio. But when you're older, you just don't have as much of that labor capacity left in your future. And so you need to dial back the risk in your financial portfolio 'cause you just don't have that same backup from your future wage income.

ROSALSKY: Fascinating. OK. Another complicated thing I'm hoping you can explain - like, investing in the world market. So there's this weird thing that happens. I guess, according to economic theory, it doesn't make sense to invest in your home market disproportionately. But can you explain what that is and how we should think about that?

CHOI: So there's a big global economy out there, and there are risks that are hitting every single country. So economic theory would say, you want a diversified portfolio that holds a bit of every country in the world, a stock of every country in the world. And in fact, you want to hold stocks in proportion to how much of the world market cap is embodied in each country's stock market. What that means is that, really, you should be holding only about 40% of your stock portfolio in U.S. stocks, and the remaining 60% should be invested in international stocks.

Now, what we observe in every country in the world is that people like to hold disproportionately the stocks of their own country. And so this is a phenomenon called home bias. And there are debates about why home bias arises. But the striking thing about the popular author is that they all recommend home-biased portfolios. Very few of them say you shouldn't hold any international stocks. But they all recommend that you hold much fewer than 60% of your stock portfolio in international stocks, which is quite interesting.

ROSALSKY: That is interesting. I mean, is there any empirical - I mean, I can imagine somebody saying, like, the, you know, United States, for example, has a really sophisticated market, and everybody wants the list. And the S&P 500, it's a more diversified market. There's - the technology companies are all here. The future is technology. So it makes sense to put more money - if you're an American, it makes more sense to put - maybe home bias is because of that.

CHOI: Well, so first of all, people in France invest disproportionately in the French market. People in England invest disproportionately in the U.K. market. And so, you know, everybody can't be right. It just seems to be a little bit of jingoism.

ROSALSKY: (Laughter).

CHOI: A lot of people just like their - stocks that are familiar. Now, in terms of the attractiveness of the U.S. market itself, it's true that the U.S. is the dominant stock market in the world. But just because it has all of these advantages doesn't necessarily mean that returns are going to be higher going forward. It can mean that prices today are higher. But if anything, higher prices today mean lower returns going forward because a lot of those advantages have been priced in. Now...

ROSALSKY: Interesting.

CHOI: It is true that the U.S. stock market has had a fantastic century. The U.S. stock market has done, I think, better than almost every other stock...

ROSALSKY: There's been some bumps. There's been some bumps.

CHOI: There's been some bumps. But over the last few decades and over the last century, I think the U.S. stock market has outperformed most stock markets in the world, if not all. Probably not all, but certainly, it has been a very strong performer. And so if you were simply looking at history and were to extrapolate that history up, then you might say, yeah, a hundred percent allocation to the U.S. stock market is the way to go going forward. That's assuming that history is going to repeat.

ROSALSKY: What's the phrase? Past performance is no guarantee of future results. Something like that?

CHOI: Yeah, yeah. So we don't know if the U.S. is going to have another great century. And so economists say you should hedge your bets and diversify across countries rather than just going with the winner from the past.

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ROSALSKY: So I guess we're almost done here. I kind of want to just open up the floor 'cause I haven't covered everything in the paper. And do you think there's, like, anything that we haven't covered that, you know, really jumps out at you as, like, this chasm between the two different sides of this and that you think is worth commenting on?

CHOI: The one big thing that we haven't talked about yet is adjustable-rate versus fixed-rate mortgages. The popular authors are quite unanimous in recommending fixed-rate mortgages. These are safe. They're reliable. Whereas benchmark economic models would say that actually adjustable-rate mortgages are kind of awesome because they tend to have payments that decrease in economic recessions because they are pegged to this interest rate that tends to go down in recessions. So you're kind of getting payment relief at exactly the macroeconomic moments you want the payment relief to come to you.

Fixed-rate mortgages are not actually risk-free even - we think of them as risk-free because the nominal amount of the payment is fixed over time. But as soon as they say that the nominal amount is fixed over time, you realize, hey, there's inflation lurking in the background. And if inflation is really high, that means that you're getting a good deal as a fixed-rate borrower. That means that if inflation is fairly low, that means you're actually taking on a bigger debt burden than you would have if inflation were really high.

So actually, fixed-rate mortgages have their own risks. And because fixed-rate mortgages have two features - one is that the duration in which you're locking in the interest rate is longer than for a fixed-rate - or for adjustable-rate mortgage where that interest rate is adjusting all the time - usually, when you need to lock in an interest rate for a longer period of time, the interest rate's going to be higher.

Now, adjustable-rate mortgages have their own disadvantages. So it's true that the size of the payment does fluctuate. And so in the short term, you do face some risk when it comes to adjustable-rate mortgage. And so if you're really stretching to buy the house, if you're really stretching to make mortgage payments, then actually, a fixed-rate mortgage is probably better than adjustable-rate mortgage. But if you're leaving yourself a buffer, what the economic models say is that - net, net, net - when you add up all the different factors, most people should be getting an adjustable-rate mortgage.

ROSALSKY: That's interesting. Yeah. I mean, like, for, like, a moment right now, like, where people are worried about inflation, the mortgage rates are - have kind of gone up quite a bit over the last year. It seems like a particular moment right now where, like, maybe a...

CHOI: Adjustable-rate mortgage.

ROSALSKY: ...Adjustable-rate mortgage might actually make more sense. And - but you're saying, like, always, it makes more sense, potentially, if you have a buffer.

CHOI: I mean, the one exception is when fixed-rate interest rates are very low.

ROSALSKY: Yeah.

CHOI: And so actually, when the fixed-rate mortgage interest rate was quite low recently, the economic models say that you might prefer the fixed-rate mortgage by just a little bit over the adjustable-rate mortgage. But it's really close. But in kind of typical economic conditions, you're going to want adjustable-rate mortgage.

ROSALSKY: I'm interested in this one 'cause I'm actually thinking about buying a house right now. So I'm, like...

CHOI: Yeah.

ROSALSKY: ...Selfishly interested in this when I was just assuming that 30-year was better. But, like, now I'm like, hmm.

CHOI: Yeah, I mean, if you're trying to...

ROSALSKY: Yeah, and I will also say that from a personal perspective, there is this probably irrational kind of fear that, like - in, like, kind of a distrust of financial institutions where, like, oh, they could just jack up this interest rate at any moment, and so there's a utility to having, like, a predictable - and not be subject to shocks.

CHOI: I think there is this real psychological angle there. The difference between a fixed-rate mortgage and an adjustable-rate mortgage is that for the fixed-rate mortgage, the risks manifest themselves over a long period of time. So if there's constantly higher inflation over the life of your mortgage, then you're going to do well. If it's not so high, you're going to do poorly. But in the short run, the payments are fairly fixed.

ROSALSKY: Yeah.

CHOI: With adjustable-rate mortgage, the overall real value of the repayments is almost completely insensitive to inflation. So your long-run liability is actually fairly safe. But in the short run, you get these payment shocks where, oh, my gosh, like, I need to send in a bigger check every month, and my paycheck hasn't adjusted yet to reflect inflation, and yet the size of my monthly payment has already adjusted. So it's kind of this very salient kind of shock versus one that creeps up on you over time, which is - you know, the second is what you're facing with a fixed-rate mortgage.

ROSALSKY: If you own a home, I'm curious what you have, and you don't have to answer that.

CHOI: I'm a renter for life.

ROSALSKY: You're a renter for life?

CHOI: So I do not own a home. Yeah.

ROSALSKY: OK. Nice...

CHOI: Can't be bothered.

ROSALSKY: What leads you to that? You - do you not believe in the long-run returns on a house?

CHOI: I don't think that, on average, there are huge financial differences between owning versus renting a home. And I don't get much psychological pleasure out of the notion of owning my homestead or being able to customize where I live to my heart's content. Actually, those - that latter thing just gives me a headache. And so I can't be bothered, and so I rent, and it's really convenient. And that said, I don't think there's a big financial loss to it. I tell people, if the type of place you want to live in is only available to buy, you should buy. And if you are happy living in a place where you can rent it and you're - you don't have this big psychological boost from owning your homestead, then you should feel liberated to rent. So I'm pretty laissez-faire about it.

ROSALSKY: Yeah, I've heard that - you know, one piece of advice I've heard is, like, if you live in an area where there is a lot of housing appreciation, it might make sense to buy because you're locking in, and you're not as, you know, subject to the whims of landlords. Like, if you're going to live in a...

CHOI: This is a complicated question, and I don't think the economic science has a great handle on it. This kind of question - does owning a home provide you insurance against rental price fluctuations? - that's complicated. It does provide you that sort of insurance, but you're exposed to other kinds of risks, like your neighborhood might go to pot, and your home value falls by 20%. You know, that's a pretty big hit to your net worth. There's also a lot of risk that you are exposed to at the transaction dates. So the date that you buy the home, the date that you sell the home, there's a huge amount of risk that kind of realizes itself on those dates because it depends upon are you going to match with a sympathetic buyer or sympathetic seller? And so there's just a lot of that kind of idiosyncratic undiversified risk on those transaction dates that you're exposed to under homeownership.

ROSALSKY: Well, thank you very much. This has been - I took a lot of your time, and I sincerely appreciate it. Now you've given me more anxiety about buying a home. So thanks for that.

CHOI: (Laughter) That's why I don't buy a home.

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ROSALSKY: That was James Choi, an economist at Yale. If you want to read more about his study, check out the PLANET MONEY newsletter. And subscribe to that newsletter if you haven't already. The link is in our episode notes. Or you could just Google PLANET MONEY newsletter. Today's episode was produced by Brent Baughman and edited by Jess Jiang. I'm Greg Rosalsky. This is NPR. Thanks for listening.

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