Classifications of environmental quality effects: The case of canadian cities

Abstract

Amenities are goods and services that make certain locations attractive for living and working. Quality of life on the other hand can be perceived as an expression of well-being and its importance is demonstrated by a number of publications that have been developed and rank quality of life across cities and states based on their observable characteristics. Amenities’ assessments are employed in order to produce an index to rate quality of life. It is increasingly accepted that well-being cannot be entirely based on measures of income, wealth and consumption. Other indicators more qualitative (i.e. environment) should be considered. In the broader context, quality of life measures traditional economic goods such as food and accomodation but also more qualitative factors such as environmental and social (i.e. fresh air, low criminality). Environmental factors located in a given place can be considered as part of the wealth of the region in which they are located. A classification of the effects of environmental quality on consumers’ utility and producers’ costs that is based on housing prices and income differentials is useful because it provides information about the relative attractiveness to them of the total bundle of environmental and other attributes indigenous to each region. A theory is presented for this kind of analysis and classifications producing a qualitative evaluation of cities. The methodology used a number of Canadidan cities as a case study. An amenity-productivity classification was produced and cities were eventually classified as Low/High Amenity and Low/High Productivity providing useful information as to their relative attractiveness to firms and households.