Differences in local fiscal conditions generate compensating differentials across local land
and labor markets just as we have long known amenities to do. Thus the fiscal climate
affects the quality of life across metropolitan areas. We present new results showing that
intercity fiscal differentials are nearly as important as amenity differentials in determining the
quality of life across urban areas. The paper also investigates the sensitivity of the quality-of-
life rankings with respect to assumptions about the nature of the marginal entrant. We …

The consequences of the absence of a common urban development strategy across cities in
the United States and Western Europe have been discussed earlier in this volume by
Downs, in chapter 2. Ladd, in chapter 11, furthermore documents that there is substantial
heterogeneity in local fiscal climates and that these conditions change through time. This
chapter provides a measure of how much people value various parts of the differing fiscal
packages that US cities provide. The results indicate that city residents value the fiscal …