Urban Studies, Vol. 29, No.

5, 1992 727-735

Quality-of-life Measurements and Urban Size :

An Empirical Note
James D . Burnell and George Galster
[Paper first received, September 1989 ; in final form, January 1990]

Introduction
Planners and urbanists have long been
interested in the relationship between
urban size and the resulting quality of life
for inhabitants. The new towns movement,
for example, can be seen as an attempt to
provide a superior scale of human environment compared to vast, unplanned
megalopolises . Conversely, the strategy of
promoting `growth centres' is premised on
the notion of insufficient urban size (see,
e.g., Richardson, 1978, pp . 76-77 and
105-112) . Unfortunately, the identification of the 'optimal'-sized urban area is
clouded by the fact that both amenities and
disamenities are associated with size .
Larger urban areas exist, from an economic perspective, because of productivity
advantages associated with the concentration of economic activity . Residents of
these large urban areas realise several
benefits as a consequence. Increased productivity implies higher income levels .
Certain amenities are also enhanced :
greater occupational choice, greater choice
of neighbourhoods in which to live, greater
choice of public services and tax packages
(Tiebout, 1956), and greater availability of
goods and services that have a large population threshold, such as orchestras, professional sports, zoos, etc .

However, there is also a down side to

being big. Certain amenities decline as
population increases . There are lower
levels of environmental quality, higher
crime rates, and increased congestion of
some publicly provided goods such as
highways. Amenities such as beaches and
scenic areas become congested as population size grows .
The benefits and costs of urban size have
raised the question of whether there is an
optimum urban size. At what population
may the disamenities of large size begin to
outweigh the productivity advantages?
One strand of literature that may help
answer the question of optimum urban size
is the urban quality-of-life studies .' The
focus of this literature has been to devise a
singular index by which residents' shared
evaluations of a comprehensive set of
characteristics of their urban area may be
quantified (Myers, 1987). This index is
then calculated for a sample of urban
areas, whereby they can be ranked by
`quality of life' .
The purpose of this research note is to
determine whether the pre-eminent studies
in this field implicitly suggest any pattern
between quality-of-life index value and
urban population size . If such a pattern

James D. Burnell and George Galster are at the Department of Economics, The College of Wooster, Wooster, OH 44691, USA .
They gratefully acknowledge the research assistance of Parviz Rad and the helpful comments of three anonymous referees .
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JAMES D . BURNELL AND GEORGE GALSTER

exists, does it reflect a meaningful relationship between residents' quality of life and
urban size, or does it reflect inherent biases
in the methodologies used to obtain the
quality-of-life index values?
We analyse two studies : the well-publicised Places Rated Almanac study of Boyer
and Savageau (1985), and Berger et al.
(1987). 2 These two are chosen because they
are archetypes of the two predominant
methodological approaches for estimating
quality-of-life indices and because they
provide the only published cardinal index
values of quality of life for a wide range of
urban areas in 1980 . 3 The existence of
cardinal index values allows comparisons
of the quality of life in different urban
areas of varied population sizes . We first
briefly describe these two studies, contrast
their approaches, and criticise their methodologies in terms of their biases vis-a-vis
urban size . Then we regress their calculated quality-of-life indices on urban population by employing a variety of linear and
nonlinear model specifications in order to
ascertain whether the patterns correspond
to those predicted by our criticisms .
Finally, we interpret and discuss the significance of the results .
Comparing Quality of Life across Urban
Areas : Two Approaches
The quality-of-life lierature has offered a
number of different approaches for measuring quality of life . Myers (1988) lists
four approaches to quality-of-life analysis .
They are :
-the personal well-being approach
which measures life-satisfaction of
individuals ;
-the community trends approach
which focuses on quality-of-life components and trends within the community;
-the liveability comparisons approach
which focuses on comparing different
urban areas according to a number of
objective indicators assumed to
reflect quality of life ; and

-the market/resident approach in

which housing price and/or wage differentials are theorised to compensate
for quality-of-life differences between
urban areas.4
While all the approaches attempt to identify those components which influence an
urban resident's well-being, we focus on
the last two categories because they attempt to directly compare quality of life in
different urban areas through their construction of quality-of-life indices and
their subsequent ranking of urban areas.
Boyer and Savageau (1985) represent the
liveability comparisons approach ; also see,
e.g ., Liu (1976), Bowman et al. (1981),
Conway and Liston (1981), Marlin and
Avery (1983) and Money Magazine (1987).
This approach is comprehensive in as
much as a vast number of urban characteristics contribute to their index, and ad hoc
because the way the characteristics are
measured and weighted is the arbitrary
choice of the researcher . Berger et al.
(1987) represent the market/resident approach ; also see, Getz and Huang (1978),
Rosen (1979), Roback (1982) and Izraeli
(1987) . This approach is market/resident
in as much as residents' own implicit
weightings of various urban amenities are
measured through compensating market
variations in wages and housing costs . Our
purpose here is to give an overview of
these two approaches and criticise them as
they relate to identifying a relationship
between quality of life and urban size .
Comprehensive theoretical discussions
and critiques regarding other aspects of
quality-of-life analysis can be found in Liu
(1976), Rosen (1979), Pierce (1985), Wish
(1986), Norris and Norris (1986), Myers
(1987, 1988) and Landis and Sawicki
(1988).
The Liveability Comparisons Approach
The methodology used by Boyer and Savageau for the Places Rated Alamanac rates
each area using 1980 or 1983 values of 55
aggregate variables in nine categories and

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QUALITY-OF-LIFE MEASUREMENTS AND URBAN SIZE

determines the area's quality-of-life score

by summing the ordinal rankings over the
nine categories. The nine categories include climate, housing, health care and
environment, crime, transportation, education, the arts, recreation and economics
(taxes, living costs, jobs, etc .) . Each of the
categories and the variables within them
are chosen ad hoc on the basis of the
authors' assessment of their contribution
to quality of life . For example, climate is
judged on the basis of `mildness' and six
variables are used to judge climatic conditions. The economics category is judged on
the basis of household income adjusted for
living costs and taxes, and job growth .
Furthermore, weighting each of the variables within each of the categories is based
on the authors' values rather than the
values residents may place on them . In the
crime category, for instance, both violent
and property crime are included . In
weighting the two types of crime the
authors deflate the property crime rate by
10. While residents may indeed value
safety from violent crime more than safety
from property crime there is no apparent
justification given by the authors for this
arbitrary deflation. Similar ad hoc weighting schemes are employed in aggregate
ranks across categories . Specifically, a'one'
ranking in climate is given an equal weight
to a `one' ranking in economics, for instance .
The methodology used by Boyer and
Savageau has been subject to a number of
criticisms . One criticism centres on the use
of the ad hoc weighting scheme which may
bias the rankings since they may not reflect
the actual value or importance residents
place on the quality-of-life components
(Pierce, 1985; Wish, 1986) . Another criticism regards the appropriateness and reliability of the variables chosen to measure
quality-of-life components (Landis and
Sawicki, 1988) . Since the Boyer and Savageau methodology is atheoretical, there
may not be a substantive link between
quality of life and the variables chosen to
it . A third criticism considers the compara-

729

tive nature of the study (Myers, 1987) . By

focusing on making comparisons between
areas, features that define quality of life in
particular areas may be ignored .
Of most concern to us here is the
criticism that the methodology biases the
quality-of-life scores to favour larger
areas .5 Our analysis of the method leads us
to conclude that there is such a bias, but
that it is very likely counteracted for the
largest urban areas . Variables used by
Boyer and Savageau that quantify facilities
or activities in the health care, education,
transportation, arts and recreation categories would seem to favour larger areas .
For example, in the transportation category larger areas would perform better in
four of the five variables included: mass
transit, interstate highways, airline flights
and passenger-train departures (the fifth
category is commuting time) .
On the other hand, the largest urban
areas may be penalised heavily in the
method because they tend to rank lowest in
violent crime and housing costs (Landis
and Sawicki, 1988) . Recall that violent
crime is weighted 10 times more heavily
than property crime . Thus, the higher
violent crime rates in the largest urban
areas will dramatically lower their qualityof-life scores compared to medium-sized
areas. A similar effect is produced by the
treatment of housing costs . Recall that
household income adjusted for living costs
is an indicator employed in the economics
category . To include housing costs separately in the housing category is to doublecount it because presumably it was already
factored into living costs . The largest urban areas where such housing costs are
especially high bear the brunt of this bias .
The Market/Resident Approach
We now turn our attention to a methodology that has more theoretical foundation
in the weighting scheme . The market/resident approach used by Berger et al. (1987)
is more theoretically defensible because
the weighting of the quality-of-life compo-

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7 30

JAMES D. BURNELL AND GEORGE GALSTER

nents is determined by individual residents' preferences rather than ad hoc

weighting schemes. Berger et al. base their
ratings of urban areas on the outcome of
individual behaviour . They rely on individuals revealing their preferences through
inter-urban mobility and their subsequent
contribution to urban housing and labour
markets' demands and supplies, respectively . The intuition of this approach is
that the abundance of highly valued amenities in an area will attract an influx of
residents who will then tend to bid up
housing prices and bid down wages there .
They use regression analysis, specifying a
hedonic housing expenditures equation
and a wage equation of 1980 data based on
individuals, wherein market characteristics, individual characteristics and amenity characteristics of the urban area are
controlled . The coefficients of the amenity
variables represent estimates of the representative individuals' valuation of these
quality-of-life components . These coefficients are then employed as weights to the
quality-of-life components that, in turn,
determine the ratings of the urban areas .
The Berger et al . methodology for comparing places has appeal because it corrects
a significant flaw of Boyer and Savageau : it
provides a theoretical basis for determining weights for the quality-of-life components that are based on preference rankings as revealed through the housing and
labour markets . There still are criticisms of
their methodology, however . The first was
alluded to above . Their methodology is
based on the peferences of a representative
individual. This assumes that preferences
of different racial and sex subgroups of the
population are identical (Menke, 1987) .
Secondly, Berger et al. identify only 16
amenity variables to measure quality of
life compared to the 55 used by Boyer and
Savageau . Six of the variables relate to
climate and six relate to environmental
condition such as total suspended particulates and the number of hazardous-waste
facilities . This suggests that rankings may
be biased if other significant quality-of-life

components have been excluded. Thirdly,

their method assumes a high degree of
inter-urban mobility in response to
changes in quality of life, such that urban
conditions measured in 1980 would be
completely capitalised in housing and labour markets by equilibrating population
flows between urban areas . Finally, it
assumes that prices in housing and labour
markets will adjust rapidly in both directions in response to population flows .
Beyond this, we argue that the application of their methodology is biased in
favour of smaller urban areas. Their choice
of amenity variables, particularly the
environmental variables, seems to favour
smaller areas while amenity variables that
reflect benefits of large size, such as recreation and culture, are excluded . For
example, an earlier version of this paper
(Blomquist et al., 1985) included the existence of professional sports teams as an
amenity characteristic but this was
dropped in later versions. We are also
concerned that there are variables excluded from the model that are systematically related to population size, and that if
so, the results from the housing and wage
equations will bias the weights and therefore the rankings . We will consider two
factors: industrial structure and cost of
living . The wage equation employed by
Berger et al . contains variables on individual human-capital characteristics and
occupational characteristics, as well as the
amenity variables . Excluded from the
equation are industrial structure variables
for the urban area . Past research suggests
that there is a correlation between industrial structure and urban size (Thompson,
1965 ; Galster, 1989) . Agglomeration economies that affect industrial structure
provide productivity advantages to larger
urban areas . Thus, we would expect higher
wages in larger areas that may be attributed to productivity advantages related to
industrial structure . If industrial structure
is not controlled for in the model, then the
coefficients of some of the amenity variables will be biased . For example, the

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QUALITY-OF-LIFE MEASUREMENTS AND URBAN SIZE

environmental variables reflect disamenities and we would expect in this theoretical

framework that greater environmental deterioration would result in higher wages as
compensation . If environmental degradation is greater in larger urban areas, then
we would expect wages to be higher in
these areas, ceteris paribus. However, industrial structure which is related to population size would also lead to higher wages .
Since this is not controlled for in the
model, the wage effect attributed to industrial structure is picked up, in part, by the
environmental variables that are also related to population size . Thus, the coefficients of the environmental variables for
larger areas would overestimate the true
effect of environmental deterioration,
thereby unduly reducing measured quality
of life in larger areas .
A similar argument can be made for cost
of living. The housing and wage equations
used by Berger et al. are estimated separately . The wage variable used measures
nominal and not real wages . One of the
important components of cost-of-living
differences across urban areas is housing
costs . This suggests that there is bias since
the nominal wages of the area would be
dependent, in part, on housing costs . Since
this is excluded from the wage equation,
and if housing costs are related to population size, then the estimated wage effects of
those variables related to population size
would be greater than if cost-of-living
differences were included in the model .
The Empirical Relationship between
Measured Quality of Life and Urban Size
To ascertain what, if anything, these two
alternative ratings of urban areas tell us
about measured quality of life and urban
size we employed the following empirical
procedure . We first converted both Boyer
and Savageau's and Berger et al.'s qualityof-life values to Z-scores, so as to make
their units of measurement comparable . 6
Next, we regressed these standardised
scores on the urban areas' (SMSAs') 1980

731

population (measured in millions) . Since

we had no a priori expectations about the
functional relationship between quality of
life and urban size, we also estimated
models using squared values of population.'
Results are shown in Table 1 . When
quality of life is measured by the liveability
comparison methodology of Boyer and
Savageau we find that it is directly related
to urban population and inversely to its
squared value, both at a high level of
statistical significance . These two variables
(plus the constant) explain 41 per cent of
the variation in the quality-of-life measure .
The plot of this estimated function is
portrayed as the solid line in Figure 1 . It
shows an inverted U-shaped relationship
between quality-of-life measure and population, with a maximum occurring at
4.45m, 8 and estimated quality of life at the
sample maximum (8 .275m) only slightly
above that estimated at the sample minimum (0 .063m). When quality of life is
measured by the market/resident methodology of Berger et al. we find a radically
different pattern. The quality-of-life measure proves strongly inversely related to
population, and unrelated to the square of
population . The linear function explains,
however, less than 5 per cent of the
variation in the quality-of-life measure . It
is portrayed as the dotted line in Figure 1 .
Both of these results are consistent with
our theoretical predictions above concerning how methodological biases produce a
relationship between measured quality of
life and urban size.
Measured Quality of Life and Optimal
Urban Size Revisited
This note began with the speculation that
quality-of-life studies could shed light on
the issue of optimal urban size . Our conclusion is pessimistic, based on our theoretical and empirical analyses .
The Boyer-Savageau liveability comparison method of estimating quality of life
suggested that quality of life is highest

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732

JAMES D . BURNELL AND GEORGE GALSTER

Table 1 . Coefficients for quality of life regressed on urban

population (t-statistics in parentheses)
Boyer-Savageau

Berger et al.

Population (m)

1 .513
(13 .73)*

-0 .177
(2 .93)*

Population squared

-0 .170
(9 .66)*

NS

Constant

-0 .603
(10 .21)*

0 .133
(1 .56)

0 .41

0 .045

R2

Sample N
Population
Mean
Minimum
Maximum

328 .0
0 .517
0 .063
8 .275

185 .0
0 .753
0 .091
9 .120

NS, Not statistically significant ; dropped from the equation .

* Coefficient statistically significant at 1 per cent level (two-tail
test).
(and, by implication, optimal urban size is
achieved), on average, in urban areas of
several million population . Indeed, quality
of life was estimated, on average, to be
over 2 standard deviations higher in these
`optimal' areas than in larger ones and over
3 standard deviations higher than in smaller areas. Unfortunately, the variability of
measured quality of life around this estimate of best functional forms is considerable . For example, according to the model,
Detroit and Philadelphia should have the
highest scores (4m-5m population), yet the
highest score is actually registered by
Pittsburgh (population 2.2m) . Furthermore, as we have argued above, the
Boyer-Savageau method is atheoretical
and ad hoc . It is also likely that the
inverted U-shaped relationship between
measured quality of life and population is
not meaningful, but rather the product of
implicit bias in the method .
The Berger et al. market/resident
method of estimating quality of life suggested that quality of life is highest, on
average, in the smallest urban areas with
only a few hundreds of thousands of
population . Their implicit answer to the
question of optimal urban size would be,

`small is beautiful' . However, there was

only about a 1 .5 standard deviation difference in measured quality of life between
the smallest and largest areas, as estimated
by the best functional form . In addition,
the variation of actual measurements of
quality of life and this best functional form
was exceedingly high . Finally, the implicit
biases of the Berger et al. method probably
contribute to the estimated relationship
between measured quality of life and urban size .
In conclusion, the two major approaches
for estimating quality of life across urban
areas implicitly suggest patterns between
the quality-of-life index value and urban
population size . The patterns are, however, radically different between the
methods, have a great deal of variance
around predicted values, and are
probably subject to substantial methodological biases . They thus tell us little of use
concerning the issue of optimal urban
size .9
It is our belief that the market/resident
approach holds more potential in this
regard due to its superior theoretical
grounding . Nevertheless, as suggested
above, important improvements in its em-

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733

QUALITY-OF-LIFE MEASUREMENTS AND URBAN SIZE

4

N
N

N
'

`6

I I I I I I I I J
2

4
5
Population (m)

0
CY

-2

-3

-4

Figure 1 . Estimated relationships between quality of life and urban size: (-) Boyer-Savageau ;
(. . . . ) Berger et alL
pirical applications need to be made before
it can reach its fullest potential in supplying meaningful cardinal indicators of quality of life across urban areas . Whether even
then the method will provide enough evidence suggestive of an optimal urban size
is speculative . More definitive payoffs
could be gained if research were devoted to
uncovering how residents evaluate components of urban quality of life, how these
evaluations change over time (Myers,

1987), how they vary within metropolitan

areas (Blomquist et a/., 1988), and how
these components can efficaciously be
modified through public policy interventions .
Notes
1 . We note that quality of life may not be the
singular or sufficient indicator of net social
benefits, but merely a reasonable proxy .

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734

JAMES D. BURNELL AND GEORGE GALSTER

2 . The study chosen here is one of several

theoretical and empirical works performed
by this group of authors. Hoehn et al.
(1987) provide a formal theoretical framework for determining amenity values using
housing and labour markets . Blomquist et
a!. (1988) establish quality-of-life rankings
for urban counties . We chose Berger et a!.
because they establish quality-of-life rankings for SMSAs, thus making their study
more comparable to Boyer and Savageau's
work .
3 . Other studies, such as Bowman et al.
(1981), Conway and Liston (1981), Marlin
and Avery (1983) and Money Magazine
(1987) only publish ordinal rankings of
urban areas, not cardinal index values .
4 . Rosen (1979) and Myers (1988) label the
market/resident approach as the `wage differential approach' . However, much of the
recent analysis suggests that compensation
occurs in the housing and labour markets .
See Roback (1982) and Hoehn et al. (1987) .
5 . The empirical evidence here is mixed .
Becker et al . (1987) plot the means of the
variables used by Boyer and Savageau
against the log of population and find that
larger areas have higher scores. On the
other hand, Landis and Sawicki (1988)
report that they examined statistical correlations between population and ratings in
the individual categories, and concluded
there was no size bias . Neither employed
the method to be used here .
6 . That is, each quality-of-life index value for
a sample urban area has subtracted from it
the sample mean index value, and the
difference is divided by the sample standard deviation .
7 . We also tried cubic terms, but with no
meaningful results .
8 . The maximum is found by differentiating
the estimated function with respect to
population, setting the result equal to zero,
and solving for population .
9 . Indeed, as claimed by Richardson (1978,
ch . 5) based on theoretical considerations
alone, there may be no unique optimal size
at all .

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