Are big cities bad places to live?

Kevin Bryan directs my attention to this David Albouy paper (pdf), which attempts to estimate the quality of life across various metropolitan areas.  Here is the key part of the abstract:

…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.

If you go to Table A1, toward the very back of the paper, Honolulu is #1, followed by some fancy places in northern California, Santa Barbara, and Santa Fe.  Last on the list are Decatur, Il, Beaumont-Port Arthur Texas, and last and also least  is Kokomo, Indiana.

The states with the highest qualify of life are out west and in New England.  I suspect these rankings are not taking heterogeneity seriously enough, as market prices capture marginal values but marginal values only for some movers.  “Livability” is actually closer to an “average value” sort of concept.  In other words, even with above average income I don’t want to have to pay Santa Barbara home prices.

In any case, the topic has come up lately and I thought I would pass these results along.


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