Are Big Cities Really Bad Places to Live? Improving Quality-of-Life Estimates across Cities

David Yves Albouy ()

No 14472, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The standard revealed-preference hedonic estimate of a city’s quality of life is proportional to that city’s cost-of-living relative to its wage-level. Adjusting the standard hedonic model to account for federal taxes, non-housing costs, and non-labor income produces quality-of-life estimates different from the existing literature. The adjusted model produces city rankings positively correlated with popular-literature and stated-preference rankings, and predicts how housing costs rise with wage levels, controlling for amenities. Mild seasons, sunshine, and coastal location account for most quality-of-life differences; once these amenities are accounted for, quality of life does not depend on city size, contrary to previous findings.

JEL-codes: H4 J3 Q51 Q54 R1 (search for similar items in EconPapers)
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