29.9 Everyday and Business Application: Endowment Effects and Housing Markets: In end-of-chapter exercises 6.9 and 7.6, we derived the curious prediction that homeowners are made better off by housing price fluctuations regardless of whether housing prices go up or down. This was because, assuming some degree of substitutability between housing and other goods (and no transactions costs), homeowners will sell their homes whenever housing prices change, buying smaller homes and consuming more when price increases and buying larger homes and consuming less when housing prices fall.