This paper constructs a panel of household and firm amenity valuations for 37 cities in the United States from 1977 to 1995. A key finding is that many cities attractive to firms are unattractive to households, and vice versa. In addition, estimates from an error correction model (ECM) indicate that improvements in urban quality of life and quality of the business environment have strong positive effects on growth as measured by equilibrium city shares of workers, but negative effects on equilibrium city shares of retirees. The former result reflects outward shifts of the labor supply and demand curves in response to improved amenities. The latter arises because retirees avoid high land rents that result from in-migration of firms and workers. Moreover, following a shock to the system of cities, worker-population shares converge back to long run equilibrium in 8-1/2 years while retiree-population shares converge back in 6 years. The longer response time of the worker population likely reflects the cost of adjusting the distribution of industryspecific human and physical capital

Since the seminal work of Engle and Granger (1987) cointegration has become the prevalent tool of time series econometrics. Every modern econometrics text covers the statistical theory necessary to master the practical application of cointegration, Campbell, Lo and MacKinlay (1997), Hamilton (1994) and Hendry (1995, 1996) being amongst the best sources. Cointegration has emerged as a powerful technique for

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