22/5/18: Poor Showing by the U.S. Cities

Mercer 2018 Quality of Living rankings are out: https://mobilityexchange.mercer.com/Portals/0/Content/Rankings/rankings/qol2018i321456/index.html. Summary of key results:

• Top 25:

• Not a single U.S. city makes it into top 25.
• Highest-ranked U.S. city, San Francisco, ranks 30th in the world, Boston and Honolulu - second and third highest ranked U.S. cities are in 35th and 36th places.
• Canada dominates North American rankings with 5 cities in top 35 against U.S. two cities.
• Only one North American city, Vancouver, makes it in top 10 globally.
• Switzerland and Germany (3 cities each) dominate top 10 rankings.
• Dublin ranks 34th in the world and London 41st, competitive relative to the U.S. cities, and against key peer European cities.

Quality of urban life is a key determinant of economic development, competitiveness and growth potential in the advanced economies. From this perspective, U.S. cities are lagging behind their global counterparts due to low value for money in quality of housing, poor transportation and connectivity systems, poor public safety, underinvestment in social and public amenities, and lower quality of schools. Controlling for private education and healthcare (benefits of which are highly concentrated at the top of income distributions), the U.S. cities competitiveness would be even less impressive than the above rankings suggest.

28/12/2014: Unhappy Cities

According to a new paper published by NBER, "there are persistent differences in self-reported subjective well-being across U.S. metropolitan areas, and residents of declining cities appear less happy than other Americans. Newer residents of these cities appear to be as unhappy as longer term residents, and yet some people continue to move to these areas." The question is why?

"While the historical data on happiness are limited, the available facts suggest that cities that are now declining were also unhappy in their more prosperous past. One interpretation of these facts is that individuals do not aim to maximize self-reported well-being, or happiness, as measured in surveys, and they willingly endure less happiness in exchange for higher incomes or lower housing costs. In this view, subjective well-being is better viewed as one of many arguments of the utility function, rather than the utility function itself, and individuals make trade-offs among competing objectives, including but not limited to happiness."

While this sounds very plausible, an interesting follow up question is: what happens to new movers when they get better offers elsewhere or once they retire or their employment terminates? Do these newcomers leave? Do they attempt to secure new employment in the area? Do they engage in entrepreneurship whilst in their employment or after?

The reason why these questions are pivotal is that human capital is like other forms of capital: once it is mobile, it moves to higher returns on investment, but it also is footloose. Since investment in human capital does not end with current stage employment, loss of past human human via exit from the area is also a loss of future human capital increases. Securing human capital is about as important as attracting it.

For the paper quoted, see: Glaeser, Edward L. and Gottlieb, Joshua D. and Ziv, Oren, Unhappy Cities (July 2014). NBER Working Paper No. w20291. http://ssrn.com/abstract=2471184

25/2/2013: Shifting centre of [economic growth] gravity

Interesting research from McKinsey Institute (link here) on the shifting geography of urban economies growth. Worth a read. And a neat summary of economic trends:

Again, a major theme on my list of big challenges and opportunities coming our way (see presentation on this here).

You can view interactive McKinsey maps and background info here.