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Regional Air Quality and Happiness in Germany

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  • Frank Goetzke
  • Tilmann Rave

Abstract

Previous research has analyzed the impact of air pollution on life satisfaction (“happiness†) based on both subjective perceptions of environmental quality and objectively measured pollution data. This article combines these two types of environmental data in life satisfaction regressions and investigates using an instrumental variable (IV)-ordered probit approach whether perceived air quality is endogenous with respect to happiness. We find combining German 2004 socioeconomic panel data with annual readings for sulfur dioxide (SO 2 ), NO x , and PM 10 by the Umweltbundesamt (UBA; German Environmental Protection Agency) for counties that people bothered by air pollution feel less happy but that simultaneously unhappy people feel more disturbed by air pollution. Controlling for this simultaneity in an IV-ordered probit approach reveals that perceived air pollution does not have a statistically significant effect on life satisfaction anymore. We also find econometric evidence that air pollution is fully capitalized in the housing market.

Suggested Citation

  • Frank Goetzke & Tilmann Rave, 2015. "Regional Air Quality and Happiness in Germany," International Regional Science Review, , vol. 38(4), pages 437-451, October.
    • Handle: RePEc:sae:inrsre:v:38:y:2015:i:4:p:437-451
    DOI: 10.1177/0160017615589008
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    References listed on IDEAS

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    Cited by:

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    2. Sanduijav, Chimedregzen & Ferreira, Susana & Filipski, Mateusz & Hashida, Yukiko, 2021. "Air pollution and happiness: Evidence from the coldest capital in the world," Ecological Economics, Elsevier, vol. 187(C).
    3. Pan Zhang & Zhiguo Wang, 2019. "PM 2.5 Concentrations and Subjective Well-Being: Longitudinal Evidence from Aggregated Panel Data from Chinese Provinces," IJERPH, MDPI, vol. 16(7), pages 1-13, March.
    4. Arik Levinson, 2020. "Happiness and air pollution," Chapters, in: David Maddison & Katrin Rehdanz & Heinz Welsch (ed.), Handbook on Wellbeing, Happiness and the Environment, chapter 9, pages 164-182, Edward Elgar Publishing.
    5. Arik Levinson, "undated". "Happiness and Air Pollution," Working Papers gueconwpa~20-23-10, Georgetown University, Department of Economics.
    6. Shiwang Yu & Jianxia Bao & Wen Ding & Xue Chen & Xiaonan Tang & Jianli Hao & Wei Zhang & Prateek Singh, 2021. "Investigating the Relationship between Public Satisfaction and Public Environmental Participation during Government Treatment of Urban Malodorous Black River in China," Sustainability, MDPI, vol. 13(6), pages 1-17, March.
    7. Gianni Betti & Laura Neri & Marco Lonzi & Achille Lemmi, 2020. "Objective Environmental Indicators and Subjective Well-Being: Are They Directly Related?," Sustainability, MDPI, vol. 12(6), pages 1-12, March.

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