The three-variable urban conditions index developed by Nathan and Fossett as a measurement of urban fiscal conditions is compared with the general obligation municipal bond ratings provided by Moody's Investors Service, Inc. for the largest cities in the United States and for 890 communities with populations over 10,000. Although communities considered to be less distressed by the index tend to have higher bond ratings, the relationship between the two measurements is not perfect. This outcome appears to result from differences in the weights attached to the urban conditions index variables and from the additional information in the larger set of variables included in bond-rating analysis. The implications of these differences for policy research are discussed.
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