The standard results from the happiness literature are that people grow accustomed to lots of living space but that we undervalue the hassle of a lengthy or stressful commute. Kahneman's work also suggests you should spend more time with your friends, so maybe that means living near them as well. I don't know if these results are true at all margins. Moving from a mid-sized mansion to a large mansion probably doesn't make you happier, but the switch from a one- to two-bedroom apartment might.
Personally, I'll stress the benefits of rooming with someone who is both compatible and intelligent, but that isn't exactly the question that was asked. Your apartment should also be a gateway to new experiences, so perhaps you should live near the highway. or other effective modes of transport.
Good advice all the way around. As regular readers of this blog know, I am a big fan of renting and left the following in the comment on his post:
After making sure it is in good condition, keeping a short-commute is key. Ideally, being close to public transportation and walking distance to eating and shopping is superb. I moved to Arlington about 10 months ago and live a block from the metro and walking distance from school and a ton of shopping. The Smithsonian is about 20 minutes away by metro. I love it! I walk much more than before and drive only once a week or so. I enjoy this location better than anywhere else I've lived. I have certainly had more space in the past, but vastly prefer access to so much.
Viewing the surrounding area as part of my amenities really makes me appreciate this location and the lifestyle it supports much more. Particularly for people without children, I think the trade-off between better location in exchange for less living space is well worth it.
Speaking of living walking distance from good food, and I'm about to walk out the door and go find something to eat!