A Revealed Preference Approach for Ranking City Quality of Life

Kahn, Matthew E.

This paper presents a new method for ranking city quality of life that requires weaker assumptions than the Rosen and Roback hedonic methodology. A simple revealed preference approach is used. If a person can raise his wages and lower his rentals by moving from city a to city b, then city a must be nicer than city b. This approach differs from the hedonic approach because a separate fixed effect is estimated for each city. The fixed effect represents the dollar value of the entire bundle of a city's local public good vector. The revealed preference approach relaxes the assumptions that: 1) All relevant city specific attributes are observed, and 2) the functional form of how attributes affect wages and rentals is known. I also show how this estimator can be used to study city quality of life dynamics from a single cross-section of rentals and home prices across cities.



More About This Work

Academic Units
Department of Economics, Columbia University
Department of Economics Discussion Papers, 669
Published Here
February 25, 2011


October 1993.