By Chris Suarez
The 10-year-old son of Freakonomics co-author Stephen Dubner thought the world was going to end two years ago. Attempting to ease those concerns, Dubner told his son the news report he saw of a doomsday street-prophet was nothing to worry about – there’s no credibility in the claim, he told his child.
Telling this story during his keynote speech at VCU’s annual Real Estate Trends Conference at the Greater Richmond Convention Center on Thursday, Dubner offered his take on pop-business media and housing market analysis.
“No offense Dad,” Dubner said his son told him after trying to soothe apocalyptic fears. “Can’t we ask someone smarter?”
Despite hundreds of awards and accolades for Dubner’s books, Freakonomics, SuperFreakonomics and many more credits and works authored in newspapers, magazines, radio and television, his son was still skeptical of his dad’s rebuttal to the end-of-the-world prophecy. On the day Dubner and his son woke up when the world was supposed to end, his son shared his annoyance with the doomsday soothsayer, but denied his previous concerns.
The point of Dubner’s story, he said, is building shallow analysis and making bold predictions is largely incentive-driven and little to no penalties exist for making what Dubner called, “wrong or dangerous” predictions about economics.
“Think about the last time you had CNBC, CNN or Fox News on or looked at an op-ed page in the New York Times, Wall Street Journal or USA Today,” Dubner said. “Think about the arguments you see in there. Are they sober, considerate and empirical arguments made by sober, considerate, empirical people? Not often.”
Sharing his concerns regarding irresponsible analysis and questionable predictions about macro and micro-economics, Dubner said, it still serves a necessary function in “planning for the future.”
Responding to his and others’ criticism of sensational business media, Dubner cited suggestions to countering consumer and analyst panic he offers readers in his newest book, Think Like A Freak.
When collecting and considering data, Dubner said, more refined approaches need to be examined. Specifically, he says researchers must think about the differences between “declared preferences” and “real preferences.”
“The circumstances under which you ask a question or gather data has a great deal to do with how reliable that data are,” Dubner said. “We’re very good at emotionally forgetting that, however … If you or your boss have ‘go-fever’ on a project, it doesn’t matter what the data says. We’re very good at finding data that confirms what we already think we know is right.”
Prior to Dubner’s keynote speech, two other discussions were scheduled in the conference. Moderated by Department of Economics chairwoman Dr. Carol Scotese, an economic overview provided by Real Estate Research Corporation President and CEO Kenneth Riggs described the current state of the financial and banking sectors.
Following the economic overview, VCU School of Business Dean Ed Grier moderated a conversation about housing trends between the 1,300 guests in attendance with Realogy Holdings Corporation CEO and President Richard Smith.
Owning nearly 28 percent of the housing market in the United States, Smith said data collected by Realogy – parent company of Century 21, ERA and Coldwell Banker – shows housing prices have made double-digit gains in 2012 and 2013.
Following what Smith called, “The worst residential housing crisis” in history, prices are expected to slowly grow in the following years with single-digit numbers.
“We should see a reversion to the norm,” Smith said. ”It should be single-digit, low to mid-market recovery from year to year. On that, we’re fairly confident.”
The recovery, according to Smith, will be dependent on other macroeconomic issues such as job growth and less federal regulation in real estate and banking. An option Smith believes might foster quicker growth is expansion of the “credit box” to offer more money to lenders. At the end of the conference, VCU Kornblau Real Estate Program Executive Director Robert Taylor said he was proud to see his students engaging and interacting with the business community and asking tough questions of the featured speakers.
“They want to know what the trends are and what’s happening over the next couple of years,” Taylor said. “First time buyers is where you have to start, it has a ripple effect through the economy … (the conference) offers an educational forum for the exchange of ideas and is a networking opportunity for our students.”
As patrons, students and sponsors ended their day at the post-conference reception, T-shirts and pamphlets for next year’s conference were distributed. The 25th Annual Real Estate Conference will again be held at the Greater Richmond Convention Center on Oct. 22, 2015.