I'm a professor at an institution similar to UC-Davis. My advice is to go there, not necessarily because the instruction could be better but due to the education you will gain from fellow students. I'm not saying that SFSU students are necessarily of lower quality that UC-Davis, its just that at a school with more "full-time" students has more opportunities for peer-learning than one that does not. SFSU is somewhat of a commuter school, just like your situation, and folks that live at home or have families are much less likely to form quality study groups that help each other learn the material and concepts for a particular course.
As an aside, an economics degree from a good institution can be quite lucrative. Especially graduate degrees ($150K+ starting salaries for Ph.D.s). Some information for you if graduate school is really in your future - I know that our grad admissions committee would be leery to give a graduate from SFSU a second look but would absolutely love a UC-Davis grad. So if your target is a good grad school, UC-Davis will help you to get there are well, chances are one of your professors will know somebody where you want to go which can help quite a bit for admission at the top places.