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Pain at the pump: Gasoline prices and subjective well-being

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  • Boyd-Swan, Casey
  • Herbst, Chris M.
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    Abstract

    In recent years, there has been growing interest in the health implications of rising gasoline prices. This paper considers the impact of gasoline prices on subjective well-being, as captured by survey questions on happiness and life satisfaction. Using rich data from the DDB Worldwide Communications Life Style™ survey, we document a negative relationship between gasoline prices and self-reported life satisfaction over the period 1985–2005. The estimated reduction in well-being, moreover, is found to be nearly twice as large among groups of likely car owners. Interestingly, although rising gasoline prices lead to an immediate deterioration in subjective well-being, analyses of lagged prices suggest that well-being almost fully rebounds 1year later and changes very little each year thereafter. Our contemporaneous estimates imply that rising gasoline prices generate well-being losses comparable to faltering labor market conditions, and likely offset some of the physical health benefits found in previous research.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0094119012000344
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Urban Economics.

    Volume (Year): 72 (2012)
    Issue (Month): 2 ()
    Pages: 160-175

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    Handle: RePEc:eee:juecon:v:72:y:2012:i:2:p:160-175

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    Web page: http://www.elsevier.com/locate/inca/622905

    Related research

    Keywords: Gasoline prices; Subjective well-being; Happiness; Health;

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    References

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    18. J.J. Ehrhardt & W.E. Saris & R. Veenhoven, 2000. "Stability of Life-satisfaction over Time," Journal of Happiness Studies, Springer, vol. 1(2), pages 177-205, June.
    19. Li, Shanjun & Liu, Yanyan & Zhang, Junjie, 2011. "Lose some, save some: Obesity, automobile demand, and gasoline consumption," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 52-66, January.
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    Cited by:
    1. Smart, Michael J., 2014. "A volatile relationship: The effect of changing gasoline prices on public support for mass transit," Transportation Research Part A: Policy and Practice, Elsevier, vol. 61(C), pages 178-185.
    2. Herbst, Chris M. & Lucio, Joanna, 2014. "Happy in the Hood? The Impact of Residential Segregation on Self-Reported Happiness," IZA Discussion Papers 7944, Institute for the Study of Labor (IZA).
    3. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2013. "The Earned Income Tax Credit, Health, and Happiness," IZA Discussion Papers 7261, Institute for the Study of Labor (IZA).

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