The Financial Times has a great article about why the world’s most “livable” cities are so un-loved. There are a lot of great points which support its main statement that the cities rated “most livable” are in fact not the ones people actually choose to live in. There seem to be “livable cities” and un-livable, busy, bustling, complex cities (e.g. New York, DC, Boston, SF, LA). It’s ironic that the purportedly un-livable cities are where so many people live.
The question of why people choose a city is fascinating to me. Not only that, but we will soon be moving from America’s “Most Livable City.” (In fact, the FT says Pittsburgh is the only American city ranking at the top of the worldwide charts!) We will be moving to one of those nasty, “complex cities”: Washington, DC.
Watch What I Do, Not What I Say
Economists like to study what people DO versus what they SAY. The most livable city indexes are about what people “say,” but the reality is that a lot of people choose to live in a big, complex, “un-livable” megalopolis. Why is this?
No doubt there are many reasons to live in a big city, perhaps chief among them is job availability and advancement opportunities. Yet, in the long-run does this really out-weigh all the negatives: crime, smog, long commutes, crazy-high housing costs, poor public schools? It seems many college-educated people could re-locate to jobs in places with less difficult living conditions, yet millions still choose to stay.*
One possibility, of course, is that workers’ higher wages compensate them for having to endure these nasty cities. Yet, when one adjusts for the higher prices (esp. housing) in these cities I doubt the big-city dwellers are raking it in.
Interesting-ness As An Amenity
Even people who choose the big, complex cities tend to talk about how expensive they are. I’d say this, along with “traffic,” are the two most common reactions I hear when I say we are moving to DC.
Every city has what economists call “amenities.” Beautiful scenery, nice parks, quality hospitals, good schools, convenient public transit, plentiful shopping, and entertainment are for most people positive amenities. That means they would be willing to pay to enjoy them. Negative amenities for most people include poor air quality, bad traffic, and high taxes. When calculating a “livability index,” these are the types of (measurable) amenities that get included.
Yet, a lot of people don’t want to live in the most livable cities. In fact, it seems like many people are willing to take lower wages so they can live in those places rated as less livable.
My impression is that there is a difficult to measure amenity that influences many people’s decisions: “interesting-ness.” To some this is a highly-valuable amenity while others could care less. The big, complex cities have plenty of downsides, yet they also offer a level of interesting-ness not easily attainable in smaller, safer places.
This would predict a lot of sorting among workers. Some types will gravitate to the the complex, interesting places while others will choose the livable cities. Neither is right or wrong. People are just different.
I think this goes a long way in explaining why I hear such polarized opinions about Washington. Roughly half of people say “I love(d) living in DC” while half say “I hate(d) DC.” This seems to partly reflect different valuations of the “interesting-ness” amenity.
*Many blog posts could be written about this topic alone. I am not trying here to explain all the factors that make cities places people want to live and the costs of living there.
This song from the great Merle Haggard seems appropriate: