Roxanne Ezzet-Lofstrom
School of Social Sciences
University of Texas at Dallas

This analysis uses intermetropolitan differences in quality of life to estimate the
value that residents place on metropolitan amenities and disamenities in land and
labor markets. Using individual-level data from the 1980 and 1990 Census of Population
and Housing merged with metropolitan-level economic, social, and environmental
factors, it estimates hedonic wage and rent equations to derive the value of
amenities and disamenities for 257 metropolitan areas in the United States. Additionally,
the extent to which capitalization of urban amenities and disamenities
changes over time is examined. Results show that the valuation of the urban environment
changes over time. Amenities appear to play a stronger role in the housing
market compared to the labor market. Capitalization appears to adjust in a dynamic
process resulting from disequilibrium in the marketplace and/or changes in consumer
preferences.

Valuation of Metropolitan Quality of Life in Wages and Rents