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Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas

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  • David Albouy

Abstract

The standard revealed-preference estimate of a city's quality of life is proportional to that city's cost-of-living relative to its wage-level. Adjusting estimates to account for federal taxes, non-housing costs, and non-labor income produces more plausible quality-of-life estimates than in the previous literature. Unlike previous estimates, adjusted quality-of-life measures successfully predict how housing costs rise with wage levels, are positively correlated with popular "livability" rankings and stated preferences, and do not decrease with city size. Mild seasons, sunshine, hills, and coastal proximity account for most inter-metropolitan quality-of-life differences. Amendments to quality-of-life measures for labor-market disequilibrium and household heterogeneity provide additional insights.

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  • David Albouy, 2008. "Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas," NBER Working Papers 14472, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:14472
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    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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