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Title: Di fferences in Quality of Life Estimates Using Rents and Home Values

Citation Type: Miscellaneous

Publication Year: 2010

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Abstract: Implicit values of amenities and the quality of life in an area can be measured by differences inreal wages across areas, where real wages are computed as nominal wages adjusted for the costof living. Computing cost of living differences involves several important issues, most importantbeing how housing prices should be measured. Previous researchers typically have used somecombination of rental payments and homeowner housing values. This paper examinesdifferences in quality of life estimates for U.S. metropolitan areas using, alternatively, rents andhousing values. We find that the two measures of quality of life are highly correlated. Valuebasedestimates, however, are considerably more dispersed than rent-based estimates, likelybecause of the recent bubble in the housing market and because housing values often provide animperfect measure of the present user cost of housing. Researchers should be cautious in usinghousing values to construct quality of life estimates.

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Authors: Winters, John V.

Publisher: Auburn University

Data Collections: IPUMS USA

Topics: Housing and Segregation, Poverty and Welfare

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