Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Can an Index Determine the Factors That Make a City 'Livable'?


As cities are getting bigger and resources are getting scarce, how do we assess what a livable city is and which one is the most livable?

I had every intention of creating an entry for the BuzzData "Best City Contest" that was sponsored by the Economist Intelligence Unit. After all, the contest had everything in it a blogger who insists his posts sound better if they're read in the voice of J. Peterman could ever want. Fame. A cash prize. A chance to develop really neat visuals to tell stories with data.

But then I got to thinking about the topic more deeply. What does it mean to be the "Best City?" How would that city function and what would it look like? What kind of data is out there to help us not only define the "Best City," but give other cities standards and metrics to measure themselves against? In short, how do our cities get better? Especially since the developed world as a whole is still reeling from the financial crisis of '07-'08 at the same time the world's population is expanding? In short, how do we redefine livable cities?

These answers have a lot of implications socially, environmentally, politically, and economically. I'm not going to pretend to have all the answers to this discussion, but this seems like another one of those areas, along with the burgeoning data economy, that has a chance to reshape the macro landscape for years and decades to come.

But how is "livablilty" defined today? The EIU annually publishes its Global Livability Rankings, which ranks 140 different cities around the world according to a list of attributes spread across five dimensions: stability, health care, education, culture & environment, and infrastructure. It's a blended assessment using both qualitative and quantitative factors, and then weighted and compiled to give rankings between 1 and 100. A more detailed breakdown of the EIU's process is here.

But livability doesn't exist in a vacuum. A city with very high livability scores is bound to have high costs. And given the nature of income distribution, it probably means the city won't have a lot of inhabitants, or it has a lot of inhabitants who aren't living really well. Is that city, then, really a "livable" city? While some data will say "yes," other data points will say "no."

Fortunately, the EIU also furnished cost data for the cities in the Global Livability Rankings. The EIU has this document on BuzzData that explains its cost of living data as well as other information here. While the livability data was ready to use, I had to work with the cost data to turn it into a cost index. I'll spare you the details of the gymnastics I went through for now because I'll want to revisit those in an upcoming article.

Some conclusions were borne out in the data visualizations I created. The first one I made with Google Fusion Tables, and you can see the contrasts around the world depending on which variable you select: cost of living, population, or livability. If you look closely when you toggle between livability and cost, it looks like there's a negative relationship between the two: cities that have high livability scores tend to cost a lot. And cities that are cheap to live in tend to have challenges in their livability.

So I created a second visualization using Tableau. And lo and behold, highly livable cities tend to be more expensive than the lower-cost cities. The trend line was put in to illustrate this more definitively. The sizes of the bubbles reflect the population of each city, and it adds an added dimension to the analysis. Again, you can see cities like Vancouver, Vienna, etc. aren't very big. But a city's population has a lot more drivers behind it than whether or not it scores well on a livability index.

You'll see that I pointed out Atlanta on this scatterplot and here's why: It scores relatively well in both livability and cost. I also pointed out Vienna, which was one of the popular picks for being the most livable city. Note the difference in cost/affordability between Atlanta and Vienna, Toronto, Vancouver, and the others clustered over there. You're not giving much in terms of livablity with Atlanta, but at the same time it's more affordable than those other cities as well.

In fact, when you look at the cluster of cities near Atlanta on that plot, you'll find that most of them are American. So I created another Tableau visualization. Here I created a new index that combines livability with affordability. Think of it as a Cost-Adjusted Global Livability Index where livability and cost are equal weight in the new calculation.

Don't like my list with Atlanta at the top? That's OK. My next article will tell you why I think this index and the other livability indices are flawed.

Twitter: @japhychron
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos