I think you forget how people make choices. One of the big issues is that if people are given the choice between an extra 3rd or 4th bathroom (that they use twi

I think you forget how people make choices. One of the big issues is that if people are given the choice between an extra 3rd or 4th bathroom (that they use twice a year) and good insulation, most people will choose the 4th bathroom. That is because the bathrooms are considered status symbols while insulation is not. Now the rational thing to do when building a house, is to choose the most energy efficient solution over any other options (e.g. a better kitchen), because more energy efficiency will allow you to afford the other upgrades sooner. However, few people make their choices like that.