Happiness and Air Pollution

I pose three questions: Does pollution make people unhappy? How much? And is the effect proportional to pollution’s estimated effects on mortality and productivity? Answers to those three questions must overcome three obstacles: unobserved characteristics of locales correlated with both pollution and happiness; selection by pollution-averse individuals to less polluted areas; and habituation by residents to local circumstances. Since 2010, when the initial few studies relating happiness to pollution were last surveyed, thirty more have been published. I discuss how the new studies tackle each of those three problems and I devise a method of comparing their findings despite their different measures of both happiness and pollution. I combine the happiness and income coefficients from each study into a willingness-to-pay measure, for a one-day, one-standard-deviation pollution reduction. Finally, I document a surprising concordance between those calculated willingness-to-pay measures and new research assessing the effects of pollution on mortality and productivity