This paper analyzed how environmental valuation affects human behavior and settlement patterns by: (1) describing, in plain terms, how quality of life is valued and reviewing some key pieces of supporting evidence; (2) using an econometric analysis to illustrate how environmental conditions affect place-to-place variation in the cost of living; and (3) suggesting how and why public policy should respond. While there is some discussion of firms and employment, the primary goal of the paper is to introduce the concept of environmental valuation and its implications for household behavior from an interregional perspective. The empirical component involves an analysis of the relationship between median household income and median housing value across the continental United States. In the first step, the error term from a bivariate regression equation is used to identify locations where people pay a premium (discount) to live due to a high (low) quality of life. In the second and third steps, an additional variable—the USDA’s natural amenity index—is added into the original equation in order to examine how unexplained variation in the local cost of living is affected and then identify the areas of the country where the natural environment matters the most. The analysis, although only exploratory in nature, highlights the importance of quality of life to the contemporary economic landscape.