This paper approaches the question of the costs of everyday residential noise pollution by examining a series of ‘happiness regressions.’ We control for the possibility that an unobservable characteristic (which we denote ‘complainer type’) may lead people both to complain more and cause them to declare themselves to be less happy. We further control for the possibility that a standard estimate of the marginal utility of income may suffer from endogeneity and will be under-estimated if ‘effort’ is not adequately taken into account. We find perceived noise pollution to exert a negative and highly significant effect on happiness. We then calculate the required income transfer to compensate for the noise and find the costs of noise pollution to be on the order of €106 per month per household.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
9885.
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