La Dolce Vita: Hedonic Estimates of Quality of Life in Italian Cities

This paper provides an assessment of quality of life in Italian cities using the hedonic approach. We analyze micro-level data for housing and labor markets to estimate compensating differentials for local amenities within four domains: weather, environment, services and society. Differences in local amenities across cities are reflected in large and significant compensating differentials in housing prices, whereas the effects on wages are relatively small. Quality of life varies substantially across space and is generally better in large and medium-size cities of the Center-North. Services and social conditions are strongly related to overall quality of life. We also find that, across Italian cities, quality of life is positively and significantly related to subjective well-being.