20.3 Everyday Application: Quality of Life Indexes: Every year, various magazines publish lists of “The 10 Best Cities for Living” or “The 10 Worst Cities.” These lists are constructed by magazines weighting various factors such as climate, public amenities (like school quality), crime rates, local taxes, and housing prices. Economists often sneer at these lists. Here is why.

A. Consider two cities that are identical in every way: same climate, same public amenities, same housing prices. Suppose for simplicity, unless otherwise stated, that everyone rents housing and everyone has the same tastes and income.