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Friday, October 02, 2009

Why The “Best Places to Live” Are Often The Worst: The Law and Economics of Cities (Part 1)

Hi everyone. I want to thank Dan for the invitation to return to Prawfsblawg.  I have a few things I want to blog about this month, but the main topic I want to discuss is the relationship between urban economics and the law (for a fuller version of what I'm talking about here, check out this paper.)  However, rather than begin with the difficult stuff – “agglomeration economies” and “Tiebout sorting” and such – I want to address a related topic that has always bothered me, the “Best Places to Live in America" rankings that appear in popular magazines.

When you ask people where the best places in America to live are, there are usually a number of contenders:  Honolulu, Manhattan, Beverley Hills, San Francisco, maybe Austin, Texas or Aspen, Colorado, depending on the person’s preferences, the kind of places where TV shows, movies and novels are set.  However, when magazines issue their annual Best Places to Live lists, as they do each year, they usually end up with a very different set of cities.  Kiplinger's Magazine's 2009 list declares that Huntsville, Alabama is the best city in America to live in, followed by Albuquerque, NM.  Bert Sperling, a city rating guru, has Gainesville, Florida ranked in the number one spot in the most recent version of his book Cities Ranked and Rated, while New York City comes in 241.   For small cities, the lists are no less surprising: Money Magazine ranked Louisville, Colorado, a small commuter town of little renown between Boulder and Denver, as the number one small city in the US, and a snowy, suburb of Minneapolis, Chanhassen, Minnesota number two, outpacing by a huge distance popular places like Monterey, CA, Redmond, WA and Nantucket, MA.

One is left to wonder – and the magazine editors want you to wonder – what they know that you don’t.  The answer is not much.   In fact, it’s worse than that.  The best interpretation of these lists is that they measure the places to live that combine the worst neighbors and the best conditions for home builders.  This may make them useful to a truly anti-social developer (Donald Trump perhaps?) but they have little value to readers.

However, these rankings are not merely meaningless.  Rather, they are symptomatic of an impoverished understanding of the economic life of cities and what makes local government laws and policies efficient.   The vision of urban life reflected in these lists infects both our legal and political thinking about cities and the content of urban public policy.   In order to understand how we might think about urban affairs in a better way, and how we can make cities more productive (and nicer) places, a good place to start is figuring out what's wrong “Best Places to Live" rankings.

Posted by David Schleicher on October 2, 2009 at 05:33 PM | Permalink

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Not to nitpick, but your generalization of the cities picked by so-called experts is probably no better and may be worse than the "experts" you criticize. Probably few would pick it as the very best place in the US to live, but a quick survey of home builders in Gainesville and throughout the state of Florida would reveal that it may be one of the most difficult places to build in Florida, and it's probably reasonably high on *that* list for cities of its size and larger in the southeast. (It's unclear what you mean by the term "neighbors" in the same sentence, so I won't comment.) And I'm not just saying that because as a member of an appointments committee of a law school in Gainesville, I don't want people to assume, as you do, that Gainesville's success in this insipid ranking in fact camouflages a cesspool of poorly-planned and -constructed tract homes. I swear! And I'm not being defensive!

Perhaps the insipiditude of such lists stems from the variety of regions, states, cities, neighborhoods, and blocks in the US and the variety of preferences for places to live among Americans -- that themselves shift within the life cycle of many individuals. There can be no "best place" except among people with a shared conception of how they want to live and their geographical and topographical preferences. The question is an absurd one, and the answers seem only to suit the local newspapers and chambers of commerce that trumpet them. I look forward to hearing how you think efforts to answer it are symptomatic of anything but magazine editors' desire to sell copies and advertising, because having lived in Gainesville and near Louisville, Colorado, I have found the two places have almost nothing in common.

Posted by: Mark Fenster | Oct 2, 2009 8:49:42 PM

Isn't the problem that the phrase "best place to live" depends entirely on personal preferences? It's like ranking "best styles of music" -- it all just depends on, well, what kind of music you like.

Posted by: Orin Kerr | Oct 3, 2009 1:39:42 AM

Perhaps the insipiditude of such lists stems from the variety of regions, states, cities, neighborhoods, and blocks in the US and the variety of preferences for places to live among Americans -- that themselves shift within the life cycle of many individuals. There can be no "best place" except among people with a shared conception of how they want to live and their geographical and topographical preferences. The question is an absurd one, and the answers seem only to suit the local newspapers and chambers of commerce that trumpet them. I look forward to hearing how you think efforts to answer it are symptomatic of anything but magazine editors' desire to sell copies and advertising, because having lived in Gainesville and near Louisville, Colorado, I have found the two places have almost nothing in common.

Posted by: Столешницы | Oct 3, 2009 6:46:09 AM

Great post, David. Following in the footsteps of other ratings gurus that have criticized ratings systems (Brian Leiter comes to mind), how would you improve these City Rating methods?

I believe that Bill Fischel once wrote somewhere (I forget where, and maybe I am misattributing) that the problem with these city rating systems is that they include both price and quality in ways so crude that these variables cancel each other out, such that the system tends to choose really mediocre places to live as the best. Gainesville beats out both Boulder (really pleasant but expensive) and East St Louis (really cheap but unpleasant), because the rating system gives equal weight to price and quality without allowing these variables to interact. The rating system has no way to measure the extra units of quality that one gets per dollar by living in Boulder.

I suppose that one would want some mechanism by which to measure unit of quality per dollar. Obviously, quantifying quality will be difficult except with the simplest variables (e.g., test scores for public school kids, homocides per 100,000).

Any suggestions?

Posted by: Rick Hills | Oct 3, 2009 8:58:51 AM

I don't have any insights on better methods, but the articles do have a kind of prurient appeal. When I'm on the Stairmaster at the gym, a magazine like Outside with a ranking like this rates below a general news magazine like Time or Newsweek, but above People or Entertainment Weekly.

I think it's interesting how often these rankings end up with mid-sized college towns on the list, e.g., Madison, Ann Arbor, Charlottesville, Chapel Hill, Boulder. (I've never been to Gainesville, so I can't say on that.) It suggests to me there is something qualitative, if not reducible to a formula, going on here about relative affluence, cultural and educational opportunities, quality of schools, spectator and recreational sports, city-like but non-oppressive ambience, etc.

Posted by: Jeff Lipshaw | Oct 3, 2009 10:30:17 AM

Rick -- Not to step on my next post, but both bill and you are going where I'm heading, but here's the first question. Why deflate by price? It's not a list of the best bargains, after all.

Orin and Mark -- I'll do my best to reply to these in the next two posts. Probably not in a satisfactory way, but I'll answer. But isn't the problem that there are differing tastes a common problem in ranking any consumer good -- wines, cigars, law schools? It seems to me that you're offering broader critique of the idea of rankings. Which may be right, but isn't particular to the problem of ranking cities.

Posted by: D.Schleicher | Oct 3, 2009 11:02:31 AM

David,

I think the city rankings are a bit different.

With rankings of wines, cigars, and law schools, the rankings systems speak to a relatively specific community: wine and cigar afficionados and gunner law students. These are the groups for whom price is no object, and who want prestige, national reputations, the most subtlety and complexity, etc. So the U.S. News rankings has some meaning because it speaks to the common community of gunner law students who really do want one thing: The law school that opens the most doors among the most sought-after opportunities in legal employment in the U.S.

But the "best places to live" rankings purport to be general: They purport to speak to everyone who lives somewhere, which is, well, *everyone.*

Posted by: Orin Kerr | Oct 3, 2009 12:06:33 PM

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