METHODS Ranking quality of life using subjective well-being data Mirko Moro ⁎ ,1 , Finbarr Brereton, Susana Ferreira, J. Peter Clinch University College Dublin, Richview, Clonskeagh, Dublin 14, Ireland ARTICLE INFO ABSTRACT Article history: Received 10 August 2007 Received in revised form 7 January 2008 Accepted 7 January 2008 Available online 13 February 2008 Indices ranking the quality of life in cities based on climatic, environmental and urban conditions have a long tradition in the hedonic literature. In this paper we propose an alternative set of indices based on subjective well-being (SWB) data linked to regional level amenities. SWB indicators provide a direct, self-reported evaluation of life satisfaction and can be used to rank quality of life among different locations in the absence of data on housing prices and wages. Using SWB data in Ireland, we show how to rank quality of life in regions in three different ways: 1) using a simple unconditional average of SWB across locations, 2) conditionally, controlling for personal characteristics of individuals and the environmental amenities in their area and 3) weighting the environmental endowments in each location by the marginal rate of substitution between income and the amenity. The results show a very high correlation between the three indices and suggest that variation in SWB across locations is not random, but is driven to a large extent by the endowment of location-specific amenities across locations. © 2008 Elsevier B.V. All rights reserved. Keywords: Subjective well-being Happiness Quality of life Index Local amenities Ireland 1. Introduction The study of the relationship between location and quality of life has a long tradition in the hedonic pricing literature. Variables such as climate, environmental and urban ame- nities have for a long time been employed in hedonic wage and housing regressions to account for regional wage and rent differentials, and to construct ‘objective’ quality of life indices (QoLI) with which to rank quality of life both across and within urban areas (see Rosen, 1974; Roback, 1982; Blomquist et al., 1988, for seminal contributions). Early work ranking cities based on QoLIs include Liu (1976) who ranked U.S. cities based on their level of environmental endowments. However, he arbitrarily assigned weights to the local amenities. The first to construct preference-based QoLIs was Rosen (1979). Using the hedonic method, he estimated implicit prices for pollution, crime, climate, population density and labour conditions to construct a quality of life index for fifteen major U.S. cities. In her study of U.S. cities, Roback (1982) used wage and house price differentials to compute four sets of QoLIs of U.S. metropolitan areas from different sets of amenities including crime, unemployment, air pollution, population density and growth, and climate variables. Using county-based amenity data on climate, environmental and urban conditions, Blom- quist et al. (1988) constructed rankings of 253 urban counties in the United States. Their analysis revealed substantial variation within and among urban areas. More recently, Berger et al. (2008) examined changes in climate attributes, air quality, availability of utilities and crime in the Russian housing and labor markets to examine geographic variation in quality of life. They generated QoLIs for 953 cities in the Russian Federation. Srinivasan and Stewart (2004) applied Roback's model to data for England and Wales to construct overall QoLIs of English and Welsh counties. ECOLOGICAL ECONOMICS 65 (2008) 448 – 460 ⁎ Corresponding author. Tel.: +353 1 716 2678; fax: +353 1 716 2776. E-mail addresses: mirko.moro@ucd.ie (M. Moro), finbarr.brereton@ucd.ie (F. Brereton), susana.ferreira@ucd.ie (S. Ferreira), peter.clinch@ucd.ie (J.P. Clinch). 1 This work was partly funded by the Irish Environmental Protection Agency under the ERTDI (now STRIVE) PhD programme. 0921-8009/$ – see front matter © 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.ecolecon.2008.01.003 available at www.sciencedirect.com www.elsevier.com/locate/ecolecon