The first time I told some of my non-Swarthmore friends that all of our campus housing costs the same amount — be it a faraway four-person room in ML or a central single in Wharton — they were shocked. They asked, “isn’t it unfair that some people pay just as much for the worst dorms as others do for the best dorms?” They didn’t say, “huh, do you think that policy of charging the same for every dorm room can be seen as a rejection of certain negative market principles?” but I wouldn’t have batted an eye if they did.
To answer their question: sure, it feels unfair. Swarthmore’s budget office wouldn’t try to tell you that it doesn’t feel bad to get stuck in Willets when you would have preferred literally anywhere else, or in ML when you hate waking up more than three minutes before class. But I suspect that in the same breath, they would probably point out that it would be really unfair (though unfair in a different sense) to place financial pressure on students to choose an undesirable dorm. Watching wealthier peers casually choose the most coveted dorms would only exacerbate those feelings of unfairness and inequality.
If fairness means treating everyone equally, without favoring particular groups, then using a lottery to distribute a limited number of dorm rooms is not actually unfair. In a lottery, everyone is treated equally because they all have an equal chance of getting a good number (Swarthmore’s adjustments for class year and guaranteeing that people are not placed in the bottom third for two years in a row doesn’t change this basic idea). By definition, some people will be the unlucky losers of the lottery. Still, they can’t complain that they have been treated unfairly if they have an unlucky outcome.
Making students pay more for nicer rooms, on the other hand, would be unfair because it could make certain kinds of dorms out of reach for the groups of students who are unable to afford them. Those students can complain of being treated unfairly, because the differentiated price scheme effectively limits their dorm options in a way that it does not limit the dorm options of students who can pay more. Because this is a foreseeable consequence of charging different rates, we could say that the College was treating low-income students and wealthy students differently. This policy is unfair, then, because it (knowingly) favors the particular group of students who can pay more by effectively allowing them access to a wider range of dorm choices.
The apparent unfairness that Swarthmore chooses to allow by leaving room assignments up to a lottery is really just bad luck. You get a bad room if you get a bad lottery number, and while that’s disappointing, there’s no deeper meaning to it. The unfairness it prevents, that of allowing ability to pay determine room choice, is more pernicious. So many systemic factors determine someone’s income level beside plain luck,like generations of social and economic disadvantage and disenfranchisement, and a lot of those are deeply unjust. Adopting a policy that makes cost more central in students’ housing decisions would also make certain types of social and economic disadvantage more central in that decision. That is pretty undesirable. Compared to the unfair alternative, Swarthmore students should be more than happy to stomach an unlucky housing lottery.
The housing policy is just one way that Swarthmore tries to reduce the impact of inherited social inequalities on campus. It also does this through maintaining a cash-free campus, prioritizing financial aid (with packages not including loans), and providing conference and research funding to many students, among other initiatives. While tuition is exorbitantly (and I think excessively) expensive, it is also true that Swarthmore is one of the few colleges in the country with a need-blind admissions policy and took on high deferred maintenance loads to not cut financial aid after 2008. To be fair, I doubt that every single one of Swarthmore’s expenses is undertaken intentionally, and many probably even run counter to some stated social goals. Even so, I appreciate that those goals exist so explicitly, and I think the College does more than just pay them lip service.
The desirable room shortage exemplifies one of the defining questions of economics: how do we allocate scarce available resources (desirable dorm rooms, in this case)? According to mainstream economic theory, the optimal social choice will satisfy as many peoples’ preferences as possible, and we can measure people’s preferences by their observed willingness to pay for things. The optimal solution, then, is to charge different rates for different rooms and let the consumers (us, the students) figure it out. If we’re all assumed to be rational utility-maximizers, we will choose the dorm that matches our preferences. The College gets to stay out of our choice: if they can correctly price the rooms in response to our preferences, they will create a well-functioning market. They can then stay out of our individual consumption (room choice) decisions, because the equilibrium outcome should satisfy everyone’s preferences.
Leaving the markets to distribute a scarce resource transforms what could be a social question about fair distribution (“how do we deal with scarcity of desirable dorms?”) into an empirical question (“how do we optimally price these rooms, given observed demand?”). It also has the benefit of appearing value-free. Money seems impersonal, and it seems like everyone is free to choose how much they are willing to pay. But this is only an appearance. Using willingness to pay as a measure of how much people value things (like desirable dorm rooms) only makes sense if we assume that value is the only thing that affects willingness to pay decisions. That assumption is clearly wrong.
We wouldn’t assume that a low-income person valued her life less than a wealthy person because she was not willing to pay as much for medical treatment; we would assume that she unfortunately was unable to afford as much medical treatment as she would have liked. Similarly, if we observed that lower income students tend to select the less desirable rooms when they are priced differently, it would be wrong to take that as evidence that they desire them less. The market approach to dealing with dorm room scarcity (pricing rooms by their desirability) conflates the ability to pay with the desire for a desirable room. When we observe someone’s willingness to pay, we can’t separate how much they care about something from how much money they have to spend. Allocating things based on preferences is supposed to only take the value part into account, but if we use willingness to pay to measure preference then it necessarily includes the budget part too.
Assigning dorms by lottery still falls short of an ideal where everyone gets their top choice, but given the relatively small number of desirable dorms, there is logistically no way for everyone to get their top choice. Neither the lottery scheme nor the differentiated price scheme will allocate everyone their ideal dorm room. It’s a regrettable fact that we don’t have enough desirable beds for everyone to get their first-choice room in their first-choice dorm. In dealing with the problem, Swarthmore has a choice of what kind of approach to take to solve it. The lottery scheme is better than the market approach because it is fairer: it does not rest on such morally questionable assumptions and tie housing decisions more directly to economic status in a way that would treat groups of students differently based on family income.
In adopting the housing policy that they did, Swarthmore rejected market-driven economic norms in favor of a conception of fairness that tries to minimize the effect of social and economic inequality. It might seem like a technical decision, but it can also be viewed as a principled and conscientious choice. Even if the college cannot change the unfairness that exists outside our small campus, they can reject two powerful principles: that willingness to pay accurately reflects how much people value things, and that the free market is best able to solve social problems. Rejecting those principles won’t change the world, but it might challenge the way Swarthmore students think about the world.