Valuation of Public Amenities and Differences in Quality of Life among Latin American Cities

We use a life satisfaction approach for the valuation of public goods and amenities in Latin American cities. We apply a homogenous database of seventeen cities gathered by the Development Bank of Latin America CAF. Using the estimated monetary value for several public goods and neighborhood amenities we construct a city level quality of life index. We find that access to electricity, access to running water and security are the three largest valued urban characteristics in terms of life satisfaction and housing satisfaction. The monetary equivalent valuations represent more than duplicating the household per capita income. Lacking access to them has a tremendous impact on quality of life. We also show that although richer households have more access, public good and amenities are a source for reductions in quality of life disparities.