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

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

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.

Suggested Citation

  • Boyd-Swan, Casey & Herbst, Chris M., 2012. "Pain at the pump: Gasoline prices and subjective well-being," Journal of Urban Economics, Elsevier, vol. 72(2), pages 160-175.
  • Handle: RePEc:eee:juecon:v:72:y:2012:i:2:p:160-175
    DOI: 10.1016/j.jue.2012.05.002
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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).
    2. 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).
    3. 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.
    4. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2016. "The earned income tax credit, mental health, and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 18-38.
    5. Radek Janhuba, 2016. "Do Victories and Losses Matter? Effects of Football on Life Satisfaction," CERGE-EI Working Papers wp579, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    Keywords

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

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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