Richard Florida

What makes a city happy?

Director, Martin Prosperity Institute, University of Toronto, Mar 04, 10.

Tagged with quality of life, economy, cities, happiness

Earlier this week, I discussed the new Gallup-Healthways Well-Being Index of happy cities. Today, with the help of my Martin Prosperity Institute colleague Charlotta Mellander, I look at some of the social, demographic, and economic factors that might be associated with the happiness and well-being of cities.
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The Gallup-Healthways is the first comprehensive data set we know of that tracks happiness and well-being at the metropolitan level, providing data from a large-scale survey of individuals across 185 metro regions.

[Editor’s note: According to the Gallup-Healthways Well-Being Index, Houston/Sugarland/Baytown ranked 26th out of the 52 cities in terms of well-being, in between Los Angeles and Baltimore and worse than the other large cities in Texas. San Antonio ranked 11th, Dallas/Fort Worth/Arlington ranked 12th, and Austin/San Marcos ranked 16th.]

As usual, we point out that our analysis points only to associations between variables. It does not specify causation or the causal direction of those associations which are questions for future research. Still, the results are interesting across several dimensions.

Income, Wages, and Output: So what is the relationship between metro-level happiness and income, wages, and output? We find moderate correlations between city happiness and wages (.45), income (.4), and economic output per capita (.37). The scatter-graphs below show the relationships are reasonably linear, though there is a better fit for wages and income than for output per capita.

Unemployment: Conventional wisdom and academic studies suggest that a rising unemployment rate would take a big toll on happiness. We find a moderate correlation between unemployment and happiness across U.S. metros. The correlation between happiness and the unemployment rate is -.34 and between it and the year-over-year (December 2008 to December 2009) change in unemployment is -.3.
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Human Capital: Happiness at the city or metro-level is more closely associated with human capital [measured as share of the population with a B.A. and above] with a correlation of .68 - the strongest correlation of any of the variables we looked at.

Creative Class: Happiness is also associated with the creative class, a correlation of .45. The scatter-graph below shows a fairly linear relationship.

High-Tech: Happiness is also associated with locations that have higher concentrations of high-tech industries. We find a correlation of .41 between it and the Milken Institute’s Tech-Pole measure.

Working Class: On the other hand, metro-level happiness is negatively associated with the working class, -.34, a finding which is similar to that for states.