Assessing Regional Quality of Life: A Call for Action in Regional Science

Intellectual appeal and simplicity of use has led to the widespread application of the spatial hedonic model in assessing regional quality of life. Yet, the traditional spatial hedonic approach contains numerous assumptions, which typically are untested. Violation of the assumptions in practice can lead to significantly biased estimates of regional quality of life. More sophisticated econometric approaches have been developed to reduce the biases. However, each approach typically only addresses one or two of the concerns. More promising is the use of structural models, which by design have the potential to overcome all the limitations of the spatial hedonic approach.