IDEAS home Printed from https://ideas.repec.org/p/qed/wpaper/1287.html
   My bibliography  Save this paper

Quality Of Life, Firm Productivity, And The Value Of Amenities Across Canadian Cities

Author

Listed:
  • David Albouy

    (University of Michigan)

  • Fernando Leibovici

    (New York University)

  • Casey Warman

    (Queen's University)

Abstract

This paper presents the first hedonic general-equilibrium estimates of quality-of-life and firm productivity differences across Canadian cities, using data on local wages and housing costs. These estimates account for the unobservability of land rents and geographic differences in federal and provincial tax burdens. Quality of life estimates are generally higher in CanadaÂ’s larger cities: Victoria, Vancouver are the nicest overall, particularly for Anglophones, while Montreal and Ottawa are the nicest for Francophones. These estimates are positively correlated with estimates in the popular literature and may be explained by differences in climate. Toronto is CanadaÂ’s most productive city; Vancouver, the overall most valued city.

Suggested Citation

  • David Albouy & Fernando Leibovici & Casey Warman, 2012. "Quality Of Life, Firm Productivity, And The Value Of Amenities Across Canadian Cities," Working Paper 1287, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1287
    as

    Download full text from publisher

    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1287.pdf
    File Function: First version 2012
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    2. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August.
    3. Jesse M. Shapiro, 2006. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 324-335, May.
    4. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    5. Serge Coulombe, 2000. "New Evidence of Convergence Across Canadian Provinces: The Role of Urbanization," Regional Studies, Taylor & Francis Journals, vol. 34(8), pages 713-725.
    6. Roback, Jennifer, 1988. "Wages, Rents, and Amenities: Differences among Workers and Regions," Economic Inquiry, Western Economic Association International, vol. 26(1), pages 23-41, January.
    7. Stuart A. Gabriel & Stuart S. Rosenthal, 2004. "Quality of the Business Environment Versus Quality of Life: Do Firms and Households Like the Same Cities?," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 438-444, February.
    8. 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.
    9. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
    10. Beeson, Patricia E & Eberts, Randall W, 1989. "Identifying Productivity and Amenity Effects in Interurban Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 443-452, August.
    11. Beeson, Patricia E., 1991. "Amenities and regional differences in returns to worker characteristics," Journal of Urban Economics, Elsevier, vol. 30(2), pages 224-241, September.
    12. David Albouy, 2009. "What Are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values," NBER Working Papers 14981, National Bureau of Economic Research, Inc.
    13. Serge Coulombe & Frank C. Lee, 1995. "Convergence across Canadian Provinces, 1961 to 1991," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 886-898, November.
    14. Casey Warman, 2007. "Ethnic enclaves and immigrant earnings growth," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 40(2), pages 401-422, May.
    15. Albouy, David, 2012. "Evaluating the efficiency and equity of federal fiscal equalization," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 824-839.
    16. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March.
    17. Chen, Yong & Rosenthal, Stuart S., 2008. "Local amenities and life-cycle migration: Do people move for jobs or fun?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 519-537, November.
    18. Richard B. Peiser & Lawrence B. Smith, 1985. "Homeownership Returns, Tenure Choice and Inflation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(4), pages 343-360, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Franco, Sofia F. & Cutter, W. Bowman, 2022. "The determinants of non-residential real estate values with special reference to environmental local amenities," Ecological Economics, Elsevier, vol. 201(C).
    2. Shi, Tie & Zhu, Wenzhang & Fu, Shihe, 2021. "Quality of life in Chinese cities," China Economic Review, Elsevier, vol. 69(C).
    3. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    4. David Albouy & Alex Chernoff & Chandler Lutz & Casey Warman, 2019. "Local Labor Markets in Canada and the United States," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 533-594.
    5. Antoine Bonleu, 2017. "Sun, Regulation and Local Social Networks," Working Papers halshs-01502604, HAL.
    6. Gustavo A. García, 2019. "Agglomeration economies in the presence of an informal sector: the Colombian case," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(2), pages 355-388.
    7. Jørn Rattsø & Hildegunn E Stokke, 2015. "Handling amenities in income taxation: Analysis of tax distortions in a migration equilibrium model," Working Paper Series 16315, Department of Economics, Norwegian University of Science and Technology.
    8. 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.
    9. Lu Zhang & Hongfei Yu & Zhongfa Zhou & Fangxin Yi & Dong Li, 2023. "National Big Data Experimental Area and the Unexpected Booming of the Housing Price in Guiyang of Guizhou Province of China," Land, MDPI, vol. 12(2), pages 1-21, February.
    10. Takatoshi Tabuchi & Jacques†François Thisse & Xiwei Zhu, 2018. "Does Technological Progress Magnify Regional Disparities?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 647-663, May.
    11. Enami, Ali & Reynolds, C. Lockwood & Rohlin, Shawn M., 2023. "The effect of property taxes on businesses: Evidence from a dynamic regression discontinuity approach," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    12. Thomas Murray & David Maddison & Katrin Rehdanz, 2013. "Do Geographical Variations In Climate Influence Life-Satisfaction?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-21.
    13. repec:hal:spmain:info:hdl:2441/1kv8mtgl748r0ahh12air9erdc is not listed on IDEAS
    14. Albouy, David, 2012. "Evaluating the efficiency and equity of federal fiscal equalization," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 824-839.
    15. Norbert Hiller & Oliver Lerbs, 2015. "The capitalization of non-market attributes into regional housing rents and wages: evidence on German functional labor market areas," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 35(1), pages 49-72, February.
    16. Jenna van Draanen & Kanna Hayashi & M.-J. Milloy & Ekaterina Nosova & Hennady Shulha & Cameron Grant & Lindsey Richardson, 2021. "Material Security as a Measure of Poverty: A Validation Study with People Who Use Drugs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 157(2), pages 501-521, September.
    17. Huang, Daisy J. & Leung, Charles K. & Qu, Baozhi, 2015. "Do bank loans and local amenities explain Chinese urban house prices?," China Economic Review, Elsevier, vol. 34(C), pages 19-38.
    18. Wei Zou & Jingjing Li & Zhe Shu, 2022. "Urban Quality of Life and Production Amenity in Chinese Cities," Sustainability, MDPI, vol. 14(4), pages 1-32, February.
    19. Jørn Rattsø & Hildegunn E. Stokke, 2017. "National income taxation and the geographic distribution of population," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(5), pages 879-902, September.
    20. Paul Frijters & Benno Torgler & Grace Gao & Daniel Melser, 2016. "Revealed Preference Measures of Quality of Life in Australia's Urban and Regional Areas," The Economic Record, The Economic Society of Australia, vol. 92, pages 15-29, June.
    21. Sofia B. S. D. Castro & João Correia-da-Silva & José M. Gaspar, 2022. "Economic geography meets Hotelling: the home-sweet-home effect," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(1), pages 183-209, February.
    22. Fredrik Carlsen & Stefan Leknes, 2019. "The paradox of the unhappy, growing city: reconciling evidence," Discussion Papers 907, Statistics Norway, Research Department.
    23. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    24. Roberto Gallardo del Angel, 2017. "A Quality of Life Index of Mexican cities: An equalizing-difference approach," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 14(1), pages 73-98, Enero-Jun.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Craig Kerr, 2017. "The effect of amenities on local wage distributions," Letters in Spatial and Resource Sciences, Springer, vol. 10(2), pages 215-228, July.
    2. David Albouy, 2009. "What Are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values," NBER Working Papers 14981, National Bureau of Economic Research, Inc.
    3. John Winters, 2013. "Differences in quality of life estimates using rents and home values," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 377-409, October.
    4. Partridge, Mark D. & Rickman, Dan S. & Ali, Kamar & Olfert, M. Rose, 2010. "Recent spatial growth dynamics in wages and housing costs: Proximity to urban production externalities and consumer amenities," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 440-452, November.
    5. Yan Song & Jiang Zhou & Yingjie Zhang & Dingxin Wu & Honghai Xu, 2022. "How Much Are Amenities Worth? An Empirical Study on Urban Land and Housing Price Differentials across Chinese Cities," Land, MDPI, vol. 11(6), pages 1-16, June.
    6. Albouy, David & Lue, Bert, 2015. "Driving to opportunity: Local rents, wages, commuting, and sub-metropolitan quality of life," Journal of Urban Economics, Elsevier, vol. 89(C), pages 74-92.
    7. Shi, Tie & Zhu, Wenzhang & Fu, Shihe, 2021. "Quality of life in Chinese cities," China Economic Review, Elsevier, vol. 69(C).
    8. Heather M. Stephens & Mark D. Partridge, 2015. "Lake Amenities, Environmental Degradation, and Great Lakes Regional Growth," International Regional Science Review, , vol. 38(1), pages 61-91, January.
    9. David Albouy & Bert Lue, 2014. "Driving to Opportunity: Local Rents, Wages, Commuting Costs and Sub-Metropolitan Quality of Life," NBER Working Papers 19922, National Bureau of Economic Research, Inc.
    10. 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.
    11. C. Lockwood Reynolds & Shawn Rohlin, 2014. "Do Location-Based Tax Incentives Improve Quality Of Life And Quality Of Business Environment?," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 1-32, January.
    12. Daniel A. Broxterman & Chun Kuang, 2019. "A revealed preference index of urban amenities: Using travel demand as a proxy," Journal of Regional Science, Wiley Blackwell, vol. 59(3), pages 508-537, June.
    13. Bieri, David S. & Kuminoff, Nicolai V. & Pope, Jaren C., 2023. "National expenditures on local amenities," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    14. Davidsson, Michael & Cortes, Bienvenido, 2017. "The Role of the Housing Supply and the Regulatory Environment in Economic Growth of Micropolitan Statistical Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 47(1).
    15. David Albouy & Walter Graf & Ryan Kellogg & Hendrik Wolff, 2016. "Climate Amenities, Climate Change, and American Quality of Life," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(1), pages 205-246.
    16. Hongbo Wang, 2016. "The Texas economic model, miracle or mirage? A spatial hedonic analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(2), pages 393-417, March.
    17. Dan S. Rickman & Hongbo Wang, 2017. "US regional population growth 2000–2010: Natural amenities or urban agglomeration?," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 69-90, March.
    18. Winters, John V., 2009. "Wages and prices: Are workers fully compensated for cost of living differences?," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 632-643, September.
    19. Amanda L. Weinstein & Michael Hicks & Emily Wornell, 2023. "An aggregate approach to estimating quality of life in micropolitan areas," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 70(2), pages 447-476, April.
    20. Rosenthal, Stuart S. & Ross, Stephen L., 2015. "Change and Persistence in the Economic Status of Neighborhoods and Cities," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1047-1120, Elsevier.

    More about this item

    Keywords

    quality of life; firm productivity; cost-of-living; firm productivity; compensating wage differentials;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:1287. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Babcock (email available below). General contact details of provider: https://edirc.repec.org/data/qedquca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.