Ready for the next 820? Looking for the keys to paradise of Riga city

Abstract: Improving urban quality of life is now increasingly at the top of the political agenda of modern cities. However, right policy treatment requires a thorough analysis and correct diagnosis. This paper is designed as such a diagnostic tool in the hands of urban policy makers aimed to drive the urban structural reform agenda in Riga – the regional centre of the Baltics. We provide a systematic assessment of the quality of life in Riga city both over time and in the contexts of Latvia, the Baltics and Europe, as well as link it with a comparative economic development, demographic trends, the availability of housing and dynamics of local tax revenue receipts. We find that although the quality of life in Riga tends to improve over time, in many areas progress appears to be slower than in the neighbouring capital cities - Vilnius and Tallinn. While Riga performs rather well in terms of economic growth and environmental quality compared to other European cities, we identify a large room for improvement in the areas of social trust, the quality of urban governance and how pleasant a city is to live. By running the principal component analysis on the most recent wave of Eurobarometer survey and applying the data envelopment analysis to build the European urban quality of life frontier, we conclude that Riga has a great potential to improve the urban quality of life even with its current population size and the GDP per capita level. The paper highlights how the quality of life, economic prosperity, the availability of housing, size of city budget and population growth are all closely linked in an urban context, making all these variables mutually dependent.

Keywords: urban quality of life, urban life satisfaction, safety, trust, environment, transport, infrastructure, governance, population growth, housing, municipal budget, economic growth.

JEL Codes: O18, R11, R23, R5