Hi Partha, I am working in the LUISA team that generates and evaluates land-use related indicators of urban sustainability performance to support European Commission policies. We use various indicators to study and measure the performance of cities and regions. You may find some of those indicators in the publications I added in this answer. Hope it helps!

Technical Report Direct and Indirect Land Use Impacts of the EU Cohesion Poli...

Technical Report Indicators and trends for EU urban areas Data and methods in...

There is a benchmark based on liveability (Economist Intelligent Unit- EIU) and that of ease of "doing business " (the World Bank). Both are quite transparent about their methodologies. A composite index of both will give a good indicator of both the quality of life and the standard of living attainable in cities. Whatever the purpose of the ranking exercise, it is always good practice to consider convergence/divergence to Zipf's law.Starting at the national/regional level first, before scaling up to the global arena.

Benchmarking (among cities) could relate to aspects of urban form (morphology) or function and, at a higher order of resolution, both could bear on sustainability. The attached references, in which I have been involved, could be of some use but they would inevitably remain partial as a reply to your question.

2012: ‘Conceptualisation and System Design in the Monitoring of Urban Form’ (with I. Ceron Castano lead author), Planning Practice and Research, 27/5, pp. 495-511.

2015: 'Developing a Geographic Information System-Based Assessment Model for Sustainable Metropolitan Development: The Case of the Semarang Metropolitan Region, Indonesia' (I. Buchori lead author), American Journal of Environmental Sciences, online at     http://thescipub.com/PDF/ofsp.9849.pdf

Hi, there are many index available around the world but they have many problems and each of them are related to a restrictyed aspect of the life of cities. Now in the world there are a couple of attemps to build an overall indicator. Iso has published last year the 37.120 norm, but its just a guide of indicators a city must have. Its not a usefull tool for a ctiy government. ITU its working now, in a hole framework for cities. I think this work will be very interesting, altough its principal aim its to measure ICT´s. I have developed a framework and methodology to compare cities. I have applied that framework to benchmark the cities of Buenos Aires, Barcelona and New York, and its functioning well. Also I´ve made a comparative analysis of the principal cities of Argentina and it is functioning well also. If you are interested in further information please contact to me, 

You can find lots of quality of urban life articles in "Social Indicators Research". Most of them have a methodology based on comparison of various cities. 

You can also look to these publications;

Diener, E., and E. Suh. 1997. "Measuring quality of life: Economic, social, and subjective indicators."Social indicators research no. 40 (1):189-216.

Dissart, J.C., and S.C. Deller. 2000. "Quality of life in the planning literature." Journal of Planning Literature no. 15 (1):135-161.

Lee, Y.J. 2008. "Subjective quality of life measurement in Taipei." Building and Environment no. 43 (7):1205-1215.

Marans, R.W., and R.J. Stimson. 2011. Investigating quality of urban life: Theory, methods, and empirical research: Springer.

Türkoğlu, Handan, Fulin Bölen, Perver Korça Baran, and Fatih Terzi. 2011. "Measuring Quality of Urban Life in Istanbul." In Insvestigating Quality of Urban Life: Theory, Methods and Empirical Research, edited by Robert Warren Marans and Robert J. Stimson. Springer.

Yuan, L.L., B. Yuen, and C. Low. 1999. "Quality of Life in Cities―definition, Approaches and Research."Urban quality of life: Critical issues and options:1-13.

As development methods you can use to quantitative and qualitative method both independently and in combination. Both methods specify variables and measuring shapes thereof. For example, you can observe the indices of public mobility and vehicular pollution percentages against these indices and from the results make a first approach to the quality of the urban environment only from this variable. This does not mean you should make other comparisons and relationships.

However you using the complex method should use combine variables to observe the place as a field of relationships and wholes that are interconnected and impact positively or negatively with each other.

For complex model I recommend the text of Arch. Julio Cesar Gomez Acuña On "analytical and systemic Enfouqe towards full technical coordination architecture"

Just google-search "benchmarking cities".

I can see several results.