In this blog is an excellent analysis on why people buy the wrong house. In short, they underestimate the drawbacks of commuting and overestimate the value of extra space.
I might like this because based on this analysis, I bought the “right” house. Actually, commuting WAS a major factor in choosing my house, but I had other criteria, and our house met them. I am sure others do the same thing. I am sure people who pick the bigger house also have many more criteria that matter than just size. But it is likely they still underestimate the impact of commuting.
See the blog post and decide for yourself by going here: The Frontal Cortex : Buying the Wrong House
Thx to Andrew Sullivan for the link.