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Differences in Quality of Life Estimates Using Rents and Home Values

John Winters

MPRA Paper from University Library of Munich, Germany

Abstract: Implicit values of amenities and the quality of life in an area can be measured by differences in “real wages” across areas, where real wages are computed as nominal wages adjusted for the cost of living. Computing cost of living differences involves several important issues, most important being how housing prices should be measured. Previous researchers typically have used some combination of rental payments and homeowner housing values. This paper examines differences in quality of life estimates for U.S. metropolitan areas using, alternatively, rents and housing values. We find that the two measures of quality of life are highly correlated. Value-based estimates, however, are considerably more dispersed than rent-based estimates, likely because of the recent bubble in the housing market and because housing values often provide an imperfect measure of the present user cost of housing. Researchers should be cautious in using housing values to construct quality of life estimates.

Keywords: quality of life; amenities; rents; housing; wages (search for similar items in EconPapers)
JEL-codes: R13 R21 R23 (search for similar items in EconPapers)
Date: 2010-04-15
New Economics Papers: this item is included in nep-geo, nep-hap and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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https://mpra.ub.uni-muenchen.de/22455/1/MPRA_paper_22455.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/24270/1/MPRA_paper_24270.pdf revised version (application/pdf)

Related works:
Journal Article: Differences in quality of life estimates using rents and home values (2013) Downloads
Working Paper: Differences in Quality of Life Estimates Using Rents and Home Values (2012) Downloads
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