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Welfare Measures to Assess Urban Quality of Life

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  • Francesco Andreoli
  • Alessandra Michelangeli

Abstract

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.

Suggested Citation

  • Francesco Andreoli & Alessandra Michelangeli, 2014. "Welfare Measures to Assess Urban Quality of Life," Working Papers 278, University of Milano-Bicocca, Department of Economics, revised Jun 2014.
  • Handle: RePEc:mib:wpaper:278
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    References listed on IDEAS

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    Cited by:

    1. Ascari, Guido & Colciago, Andrea & Rossi, Lorenza, 2017. "Determinacy analysis in high order dynamic systems: The case of nominal rigidities and limited asset market participation," Economics Letters, Elsevier, vol. 159(C), pages 82-87.
    2. Riccardo Borgoni & Giacomo Degli Antoni & Marco Faillo & Alessandra Michelangeli, 2017. "Preferences for living in homogenous communities and cooperation: a new methodological approach combining the hedonic price model and a field experiment," Econometica Working Papers wp62, Econometica.

    More about this item

    Keywords

    Hedonic Models; Quality of Life; Structural models;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H4 - Public Economics - - Publicly Provided Goods
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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