Methodology

What makes cities good locations to live in? And what makes some citiesbetter than others? Availability, accessibility, and affordability of the keyinputs that make life easier and better. Availability, as typically we require awide range of products, services and environment to make our lives comfortable.Accessibility, as even if many of these products, services, and conditions arepresent in an area, they should be accessible to the target population. Takeeducational institutions. There may be many educational institutions in a citybut if they are not commensurate with the population, if the queues are long,then life is neither easier nor better. Affordability, as even if services andproducts are available, their prices should be within range.

Life being easier and better is different for different people. In thisstudy, we have rated cities for the socio-economic classes that tends to behighly educated, whose children tend to go to English-medium schools, who haveoccupations that yield higher levels of incomes, and who may have a higherpropensity to migrate from one city to another. These people also form the bulkof the consumer durables buying population. This section of society valuesquality and comforts, and has the means to pay for them. Market researchers callthem SEC A&B. If you’re reading this magazine, you definitely belongthere.

A good city to live in first has to have good Jobs and Incomeopportunities. We have, therefore, taken the number of job ads, annualpercentage growth in small business credit and small business accounts between1996 and 2000, annual percentage increase in savings bank accounts between 1991and 2001 as measures. A good Finance Network has become a key ingredientof our lives. The efficacy of this network has been measured in the number ofbank branches and deposits per capita as well as the numbers of ATMs for easyaccess. Prices are a key index of living conditions. Apart from generalprice levels–indices of fruit and vegetable prices–we’ve factored ineducation and medical fees, and wages that households pay to household serviceworkers (maids, servants etc.). Higher levels of overall Consumption do notdirectly impact each person’s ease of life, but they do lead to theavailability of a greater range of products and services. Thus, the number ofSEC A&B households in a city’s total population itself becomes animportant determinant, so are owned two- and four-wheelers and petrolconsumption that reflect the consumption pattern.

Availability and affordability of good Housing is another measure ofhow liveable a city is. The percentage of households with regular supply ofrunning water, good sewerage and garbage disposal mechanisms have been included.Affordability is captured by two variables–housing price increases in therecent past (increase in housing price index) and price levels (the housingprice index) compared to other cities. Education, another key variablehas been included in the form of the number of professional institutions(engineering, medical and MBA colleges) and CBSE and ICSE schools, which arerecognised countrywide. We only take ICSE and CBSE schools, as transfers toschools in other cities are easiest from these because of the standardised andrecognised quality of coursework. Health services are becoming more and moreimportant: the number of doctors, cardiologists and non-teaching hospitals have,therefore, been included. As in the case of education, these have had to be ‘normalised’for the number of SEC A&B households. Data on crime–the number of murders,rapes, molestation and sexual harassment–reflects the levels of Safety.However, many crimes are not reported, and the worse the city is in terms ofcrime, the lower are the reported crimes. We correct the bias by dividingmurders and sexual crimes by reported crimes. In other words, by dividing onepotentially biased set of measures by another, we are able to remove the bias.

Transport should generally include determinants such as road network.However, the data on roads in cities is of poor quality and does not reflectroad conditions. Roads data is given in km, which does not reflect the qualityof roads. So, we’ve used the average speed for 4-8 km and 8-15 km by publictransport and by own car to quantify this factor. We have also consideredavailability of autos and taxis to measure the efficiency of a city’stransport network.

What’s life without Entertainment? Theatres, hotels and restaurantshave all been included. The published data for all of these tends to includeonly the higher end locations, they do not capture all; but for the facilitiesof specific interest to the SEC A&B population, the higher end ones–the 4-and 5-star hotels–have been included, as have been the number of places tovisit. The SEC A&B classes are also more sensitive to a good environment ascaptured by low levels of Pollution; we have include indices that measurelevels of SO2, NO2 and suspended particulate matter in residential areas. Weatheris another important aspect of a good life: we use the variation in rainfall,maximum temperature, and the variance of average monthly temperatures from 25degrees Celsius. The rationale: extreme weather variations mean residents mustchange their living patterns with changes in weather.

First, the 47 city-specific measures were divided into the 12 broadcategories discussed above. To account for the issue of access to facilities,many of these had to be ‘normalised’ for the number of SEC A&Bhouseholds. This led to the creation of 47 ratios. Next, each of the ratios wasre-normalised by subtracting the mean and dividing by its standard deviation. Wenow had 47 measures, where each had a mean of 0, standard deviation of 1, had nounits, and could be combined without introducing any unit-related biases. Anintermediate index was then derived, by giving equal weights to each of themeasures for each of the 12 categories. This led to the creation of 12intermediate indices. The final index was then created for each city by takingthe average of each of the 12 category indices. The 12 category indices and theone overall index were then rescaled so that they had a minimum value of 0 andmaximum of 100. A higher value indicates better performance in that category.

From Outlook Money
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