Using life satisfaction data to identify urban problems, prioritize local public expenditures and monitor the quality of urban life

Abstract

Combined with housing price data, life satisfaction data can be used to assess the implicit value that individuals attach to all types of urban amenities and features, and to compute to what extent those values are reflected in housing market prices. This chapter explains the theoretical underpinnings of the methodology and reviews the results obtained when applying it to a handful of Latin American cities. It also describes how the results can illuminate public investment and finance decisions oriented towards maximizing the life satisfaction or urban dwellers. The methodology proposed can be easily integrated into the urban monitoring systems in place in a growing number of cities.