Every year, Money magazine publishes a list of “the best places to live.” I’ve always enjoyed this list as it attempts to distill what communities truly match what people would desire in a community. The winner in 2010 (in the August issue) was Eden Prairie, Minnesota

But one issue with this list is how the communities are selected. In 2009, the list was about small towns, communities between 8,500 and 50,000. In 2010, the list was restricted to “small cities,” places with 50,000 to 300,000 residents. Here is how the magazine selected its 2010 list of communities to grade and rank:

746
Start with all U.S. cities with a population of 50,000 to 300,000.

555
Exclude places where the median family income is more than 200% or less than 85% of the state median and those more than 95% white.

322
Screen out retirement communities, towns with significant job loss, and those with poor education and crime scores. Rank remaining places based on housing affordability, school quality, arts and leisure, safety, health care, diversity, and several ease-of-living criteria.

100
Factor in additional data on the economy (including fiscal strength of the government), jobs, housing, and schools. Weight economic factors most heavily.

30
Visit towns and interview residents, assessing traffic, parks, and gathering places and considering intangibles like community spirit.

1
Select the winner based on the data and reporting.

A couple of questions I have:

1. I agree that it can be hard to compare communities with 10,000 people and 150,000 people. But can the list from each year be called “the best place to live” if the communities of interest change?

2. I wonder how they chose the median income cutoffs. So this cuts out places that might be “too exclusive” or “not exclusive enough.” Are these places not desirable to people?

3. Some measure of racial homogeneity is included in several steps. How many home buyers desire this? We know from a lot of research that whites tend to avoid neighborhoods with even moderate levels of African-Americans.

4. Weighting economic factors heavily seems to make sense. Jobs and economic opportunities are a good enticement for moving.

5. I would be interested to see what kind of information they collected on their 30 community visits. How many residents and leaders did they talk to? How does one measure “community spirit”? If a community says it has “community spirit,” how exactly do you check to see whether that is correct?

Overall, this is a complicated methodology that accounts for a number of factors. What I would like to know is how this list compares with how Americans make decisions about where to live. Do people want to move up to places like this and then stay there or is the dream for many to move on to more exclusive communities (if possible)? How many Americans could realistically afford to or possibly move into these communities?

(A side note: the four Chicago suburbs in the top 100 for 2010: Bolingbrook at #43, Naperville at #54, Mount Prospect at #56, and Arlington Heights at #59. Naperville used to rank much higher earlier in the 21st century – I wonder how it has slipped in the rankings.)