City, Finance & Economy, News

Hub ranked one of nation’s most finanically sound college towns

With advantages such as high-tech industry and human capital concentrations, Boston and Cambridge ranked fifth in the top 20 most economically vibrant college towns in America.

The rankings, compiled by Atlantic magazine, were based on aspects such as per capita income, high-tech industry concentration, innovation, capital, percent of the workforce in the creative class and housing affordability.

“The skilled workforce is here,” said Boston University economics professor Claudia Olivetti. “The people that can do this type of high-tech production are located here, so you want to locate your business where the people are. It’s less costly than moving people around.”

Another key variable that may have contributed to Boston’s high ranking is the rate of innovation, or patents per capita, Olivetti said.

“… [B]etween universities, we have so many places where research is done,” Olivetti said. “All these biotech companies you see or pharmaceutical companies … there is a very high number of patents per capita in this area, because everything is concentrated here.”

Olivetti said Boston ranked high due to its large percentage of workforce in the creative class, and said that the dramatic differences in Boston’s student-professor-researcher population between the academic year and the holidays show that they make up a large portion of the population.

Amanda Albion, a manager at the locally owned frozen yogurt shop BerryLine on Newbury Street, said that running a small business can prove to be challenging, but help from a good economy and local support has kept them fairly stable.

“This city has given back a lot to us, being the first frozen yogurt shop. The thing that’s been really important for the past couple of years, especially since all of these other frozen yogurt shops have been coming—like Pinkberry,” Albion said.

Albion said that hiring local students was their way of giving back and supporting the local community, which are factors she has held to be important for years.

“So, our small business aspect is what really we’re proud of and that’s what we really push, especially in the past couple of years, because we’ve gotten a lot of competition,” she said.

M. Daniele Paserman, an associate economics professor at BU, said he disagreed with the rankings’ inclusion of the affordability of housing and that it may be the reason other college towns, such as Ann Arbor, Mich., ranked slightly higher.

“In fact, high housing prices reflect exactly a city’s ‘economic vibrancy,’ ” Paserman said in an email.

He said that high housing prices indicate that more people want to live in a particular area because there are more job opportunities, and consumption amenities.

Economics lecturer Aaron Stevens said he agreed with Paserman.

“Cost of housing … works against you if you were someone who was trying to move to the area,” Stevens said. “But you might choose to come here anyway, because the job prospects are better here.”

Stevens said that he thought the rankings were entertaining and that the study is not necessarily looking at what is most important for an individual trying to choose where to live.

“And for the individual, it’s a little bit more complicated to figure out what’s going to be the best standard of living. And it’s going to be a combination of job prospects, but also cost structure,” he said. “Even if the salaries are lower, if your cost of housing and cost of living [are] lower, you might be economically better off.”

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