Welfare measures to assess urban quality of life
Francesco Andreoli () and
Alessandra Michelangeli ()
No 09/2014, Working Papers from University of Verona, Department of Economics
The standard index of urban quality of life provides an approximated value of the quality of life, since it associates the bundles of amenities observed in urban areas with their implicit marginal prices, and not with the prices of infra-marginal units. In this paper, we adjust the standard measure to determine the monetary value of any bundle, which might substantially differ from the bundle of the marginal quantities of amenities. Our methodology relies on a welfare measure that represents the individual willingness to give up (accept) to insure (forego) a change in the current distribution of amenities across areas will take place, keeping the level of utility unchanged. We obtain a new measure, the value-adjusted quality of life index, that can be identified from parametric models of consumer preferences. We use this index to measure the quality of life in the city of Milan.
Keywords: Hedonic Models; Quality of Life; Structural models (search for similar items in EconPapers)
JEL-codes: D6 H4 R1 R2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-hap, nep-res and nep-ure
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Working Paper: Welfare Measures to Assess Urban Quality of Life (2014)
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