Not too close, not too far: Urbanisation and life satisfaction along the urban hierarchy

Empirical evidence on the effect of urbanisation on individual self-reported well-being generally points to a negative effect of urbanisation and city size, at least in most developed economies. This article aims to re-assess this conclusion by claiming that this approach overlooks the fact that a city’s positive externalities may expand well beyond the urban boundaries, as postulated in urban economics theory. Based on survey data on self-reported life satisfaction derived from different waves of Eurobarometer surveys in the period 2005–2010 covering 21 European Union member countries, the article empirically verifies the existence of a positive association between urbanisation and individual well-being, depending on the proximity to settings of higher rank in the urban hierarchy. In particular, it shows that the higher the distance from a city larger than the one of residence of the respondent, the lower the probability of being satisfied with life.