In economic literature, the quality of life (QoL) in a city is usually assessed through the standard revealed-preference approach, which defines a QoL index as the monetary value of urban amenities. This paper proposes an innovative methodology to measure urban QoL when equity concerns arise. The standard approach is extended by introducing preferences for even accessibility to amenities throughout the city into the QoL assessment. The QoL index is then reformulated to account for the unequal availability of amenities across neighbourhoods. The more unbalanced the distribution of amenities across neighbourhoods, the lower the assessment based on the new index. This methodology is applied to derive a QoL index for the city of Milan. The results show that the unequal distribution of amenities across neighbourhoods significantly affects the assessment of QoL for that city.
In order eq. ( 1) shows a positive maximum in the interval ∈ 0,1 , the following restrictions on parameters must old:and this second condition is always satisfied for 0.In order eq. ( 2) shows a positive maximum in the interval ∈ 0,1 , the following restrictions on parameters must hold:and Passing to study the function described by eq. ( 3), it has two points of maximum: and ≡ , .In order the function described by eq. ( 3) may be approximated by a 2nd-order function in the interval ∈ 0,1 , the following restrictions on parameters must hold:
This paper provides an assessment of quality of life in Italian cities using the hedonic approach. We analyze micro-level data for housing and labor markets to estimate compensating differentials for local amenities within five domains: climate, environment, services, society and economy. The estimated implicit prices are used to construct overall and domain-specific quality of life indices. We find that differences in amenities are reflected in substantial compensating differentials in housing prices, whereas the effects on wages are relatively small. Quality of life varies substantially across space and is strongly related to differences in public services and economic conditions. Overall, quality of life is highest in medium-sized cities of the Center-North, displaying relatively high scores in all the domains considered. Northern cities fare better with respect to services, social and economic conditions, while relatively worse for climate and environmental conditions. JEL: C4, D5, H4, J3, J6, P2, P3, Q2, R2 Keywords: quality of life, hedonic prices, housing markets. * We gratefully acknowledge the Osservatorio del Mercato Immobiliare for data on housing transactions, and the Fondazione Rodolfo De Benedetti for labor market data. Financial support by the Italian Ministry of University and Research is gratefully acknowledged. We thank participants to conferences in Rotterdam (AREUEA), Firenze, and Aosta (AISRe) for helpful comments. The usual disclaimer applies.
A non-linear hedonic model is used to estimate the implicit marginal prices of 17 local public goods in a Paris suburban area on an original data set of some 8200 housing units. The results reveal a robust effect of local public school quality (measured both by the fraction of junior high school students that are at least two years behind grade level and the student/teacher ratio) on house prices. It is observed that housing owners' marginal willingness to pay for reducing commuting time is roughly similar for public transportation than for car transportation. Another noticeable result is the complete capitalization of local taxes at a discount rate of 3.5%. An illustration of the potential usefulness of the results for Cost-Benefit analysis is also provided.
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