Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys

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Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys

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Welsch, Heinz

Abstract

This paper uses cross-national data from happiness surveys, jointly with data on per capita income and pollution, to examine how self-reported well-being varies with prosperity and environmental conditions. This approach allows us to show that citizens care about prosperity and the environment, and to calculate the trade-off people are willing to make between them. The paper finds that the effect of urban air pollution on subjective well-being shows up as a considerable monetary valuation of improved air quality. For instance, a representative German citizen would need to be given more than 1900$ per year in order to accept the typical urban air pollution level prevailing in Japan. The subjective marginal valuation of air pollution is compared with marginal abatement costs from the literature. Copyright 2002 by WWZ and Helbing & Lichtenhahn Verlag AG

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Article provided by Blackwell Publishing in its journal Kyklos.

Volume (Year): 55 (2002)
Issue (Month): 4 ()
Pages: 473-94
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Handle: RePEc:bla:kyklos:v:55:y:2002:i:4:p:473-94

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Other versions:
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Other versions:
- Rehdanz, Katrin & Maddison, David, 2005. "Climate and happiness," Ecological Economics, Elsevier, vol. 52(1), pages 111-125, January. [Downloadable!] (restricted)
Ada Ferrer-i-Carbonell & John M. Gowdy, 2005. "Environmental Awareness and Happiness," Rensselaer Working Papers in Economics 0503, Rensselaer Polytechnic Institute, Department of Economics. [Downloadable!]
Katrin Rehdanz & David J. Maddison, 2006. "Local Environmental Quality and Life-Satisfaction in Germany," Working Papers FNU-119, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2006. [Downloadable!]
Other versions:
- Rehdanz, Katrin & Maddison, David, 2008. "Local environmental quality and life-satisfaction in Germany," Ecological Economics, Elsevier, vol. 64(4), pages 787-797, February. [Downloadable!] (restricted)
John M. Gowdy, 2004. "Toward a New Welfare Foundation for Sustainability," Rensselaer Working Papers in Economics 0401, Rensselaer Polytechnic Institute, Department of Economics. [Downloadable!]
Heinz Welsch, 2003. "Environment and Happiness : Valuation of Air Pollution in Ten European Countries," Discussion Papers of DIW Berlin 356, DIW Berlin, German Institute for Economic Research. [Downloadable!]

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