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Cake day: August 9th, 2023

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  • Highlights

    The size of very large houses dramatically increased since 1980, leading to a “McMansion effect.”

    Homeowners’ satisfaction drops with nearby McMansions, but not neighborhood satisfaction.

    In response to the “McMansion effect”, homeowners enlarge homes and incur more debt.

    Isolated McMansions or those built before move-in don’t affect satisfaction or behavior.

    Zoning laws limiting maximum house sizes could enhance welfare by reducing pressure to upscale homes.