Measuring quality of life vs. measuring rent

I can’t agree with Matt Kahn’s snark at Santa Monica for its attempt to measure some indicators of quality of life.

What economists know how to measure is interesting. But it’s not exhaustive. Real estate prices can provide some sort of measure of quality-of-life as evaluated by people with money. But of course someone looking for housing wants to know where to find high quality of life relative to cost.

Even if we knew – which we don’t – what places are good places to live, we would still need to know what makes them good places to live, and in particular whether there are characteristics alterable by policy that would improve quality of life.

Measures of social capital – both as an individual asset and as a neighborhood characteristic – have a great deal to tell us, if we learn to measure them properly. And it’s not the case that all neighborhoods at the same level of housing cost have similar connectedness; in particular, high-priced suburbs and exurbs may do very poorly on that measure. Matt is right to ask whether we can find measures of social capital that in fact predict, e.g., mutual aid in disasters. But I don’t see how we can answer that question without trying. Surely measuring rents doesn’t get us anywhere at all.

This seems to me a clear case of cursing the darkness and making fun of people trying to light candles. And I suspect the RAND “fat cat consultants” Matt sneers at aren’t paid as well as either of us is.

Of course Matt is entitled to his opinion. However, as someone who often confronts distrust of economic methods as a problem, I wish he’d do less to foster it. Not all of us trained in the Dismal Science insist on knowing the price of everything and the value of nothing, or on the related fallacy of assuming that price and value are identical concepts.

Comments

  1. NCG says

    Well, it seemed to me that Matt’s snark was aimed more at the consultants than the City, and it didn’t really seem that snarky to me in tone. What I don’t like is this idea that you can tell very much, relatively speaking, from what people are “willing” to pay, when mostly you are measuring their ability to pay. I don’t know the shape of that curve but I doubt it varies much!

    As for the issue itself, I think we’d need a better definition of quality of life, and the best way to find that, imo, is to ask people what they want. Things like willingness to help neighbors, f.e., would *not* vary by income, I think. Maybe more by things like how long people have lived somewhere, how many hours they work — and that can be high at either end of SES, whether they have met the neighbors. Lots of not-rich people are friendly and helpful.

    Now, ability to help … that probably varies. I’d be interested to know how many people, by zip code, even have the emergency supplies they’re supposed to have. If you look at those lists, it can be hundreds of dollars if you add in meds and so forth. All the preaching in the world isn’t going to do much about it, I think.

    • NCG says

      I don’t know about studies though. So many of them sound flawed to me. I once broke down somewhere in Malibu, years and years ago, and a very cute young man, wearing a Brown sweatshirt, let me use his phone. (*Why* didn’t I flirt more?) Maybe people don’t ask rich people for help. Or more likely, they’re just never around when you need them!

  2. Maynard Handley says

    “Things like willingness to help neighbors, f.e., would *not* vary by income, I think.”

    Why do people insist on continuing to re-invent the wheel. We know the answer to this (at least one version of it). Extensive research has been done on who was and was not willing to help Jews during WW2, and the bottom line, as far as I know, is that pretty much nothing correlated with it. Wealth, education, religiosity, all apparently irrelevant. There is a cultural effect of course, horrifying as that is, but if we limit ourselves to one “cultural zone”, say western Europe, then again not much difference. (There were obviously substantial differences in outcome in different Western European countries, but those differences appear to be more a factor of how much control Germany had, and on specific decisions made by a few high-level individuals, than on differeent behavior by the mass of citizens in different countries).

    All of which suggests that, within the US, you’re unlikely to find substantial differences in “willingness to help neighbors” (at least under serious conditions like natural disaster) by income.
    You MAY (but I wouldn’t bet on it) find such differences by cultural group (eg newly arrived Asians or Latinos).

    And you may find differences for minor versions of “willingness to help” like “pick up the neighbors kids from school”, which certain people are willing to blow up into extreme significance. (I’ve no opinions about this much weaker form of “willingness to help”, other than to point out that people seem very eager to believe that everyone else in the world wants the same value for this that they want, and must be defective if they want a different value for it.)

    • Lowell says

      In interpreted the “willingness to help neighbors” concept a little differently. People are much more willing to help people they know, and that willingness is, indeed, not a whole lot different between different groups. However, wealthier people (in varying extents in different societies today) tend to know fewer people based on mere residential proximity. So it’s not really a difference in *willingness* to help, but in how often folks get called on it.

      This ties in with the Holocaust example because the effectiveness of efforts like Denmark’s evacuation of its Jews depended on Christian citizens helping out Jewish citizens that they *didn’t* know. This definitely fits the “few high-level individuals” leadership model, notably the Danish foreign minister (somewhat also the king, and unquestionably provoked by physicist Neils Bohr).