The most livable city: Calgary, Melbourne or Zurich?

by Urs E. Gattiker on 2009/06/17 · 8 comments 10,810 views

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Depending on who is responsible for the ranking – Tyler Brûlé (Monocle), The Economist Intelligence Unit or Mercer – the city of your dreams could be anywhere.

But what kind of ranking system will help you the most for deciding if you want to move to another town or not? We share a few insights about this challenge and reveal some of the strengths and weaknesses you need to know about when using Monocle, The Economist Intelligence Unit (EIU) or Mercer’s rankings for making a decision.

To make sense out of rankings, criteria used must be spelled out. For instance, Dom’s rankings of most livable cities focuses primarily on issues that matter to how you can and want to get around in a city.  The EIU uses four broad categories: stability, health care, culture and environment, education and infrastructure. Monocle includes some more obvious things as well as physical and technological connectivity, tolerance, the strength of local media and culture, plus late-night eating and entertainment options and the ease with which small business owners can start up operations. Mercer does not specify their methodology beyond “…39 factors within ten categories.”

How are these things rated and ranked?
Critical is how different raters used each measure to rank a city. For instance, tolerable pain at the dentist for one person might be intolerable for another. EIU states about its study:

    “Each factor in each city is rated as acceptable, tolerable, uncomfortable, undesirable or intolerable. For qualitative indicators, a rating is awarded based on the judgment of in–house analysts and in–city contributors. For quantitative indicators, a rating is calculated based on the relative performance of a number of external data points. The categories are compiled and weighted to provide an overall rating of 1–100, where 1 is considered intolerable and 100 is considered ideal.

EIU uses “…in–house analysts and in–city contributors…”, but Monocle does not have an expert in each city, as confirmed by Tyler Brulé in an interview with the NZZ am Sonntag. Mercer does not tell us who rates what and how, so we are unsure, but maybe whoever rates Zurich is based in Paris…

A further complication is that, since every city is ranked by only one ‘expert’, the reliability, validity and comparability of these rankings are anybody’s guess. But it definitely makes for good copy, there’s no denying that.

What is really important, or SMART metrics
Good metrics require Specific, Manageable, Actionable, Relevant, Trending (SMART) metrics. Unfortunately, none of these studies provides SMART metrics. For instance, rater reliability issues, such as whether rater A would evaluate schools in Zurich in the same way as rater B or C, is not addressed.

The focus for each of these studies is also vastly different. While Mercer focuses on issues affecting remuneration of managers, EIU also addresses lifestyle issues and entertainment. Monocle tries to cover environmental as well as socio-political matters:

    “… Zurich did move into top spot … good business culture, with local authorities offering both advice and low-cost office space…”

How this supposedly helps small business owners start up operations – one of the Monocle criteria – is not explained and therefore remains a mystery. Yes, large businesses get help from local authorities finding suitable office space.  No, the good business culture has not yet reached the tax inspectors here, I can assure you.

From a marketing point of view these surveys make for great publicity for the front-runners. And Monocle probably gives its survey the greatest spin of all – little surprise with Tyler Brûlé, a great marketer, in charge.

By contrast, EIU attempts to communicate that it is very systematic and scientific in its approach, while Mercer tries to convince readers that it is worth forking over €300 per city report.

Bottom line
These rankings are interesting to read but it’s a good idea to compliment them with additional datapoints, such as the UBS Prices and Earnings 2008 update and information from national statistics offices. Having children makes being able to wine and dine at midnight a non-issue, but having quality schools within a five-minute walk is a must.

Finally, if you like to keep a few horses, Calgary and Melbourne will probably allow you not to go broke to realize your dream. And while the former is also great for skiing, the latter has beaches nearby. Unless you have deep pockets, locating your farm near Zurich will blow your budget. But you can join me for a swim in the nearby Sihl river at the Untere Letten public bath during your lunch break – a mere five-minute walk. So what will you choose?

PS. you might be interested to read:  global MBA rankings from the Financial Times – but do we need them?

Okay, now it’s your turn. Would you have addressed any of these challenges differently? Did I miss something? Do you agree, disagree? Shout with joy or cry with pleasure, but please share your thoughts. Thank you.

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