Happiness and Air Pollution

Yang Jidong and Zhang Yiran

1, 2 School of Economics, Renmin University of China, Beijing, China

Abstract: By matching air pollution data with personal happiness survey data, this paper conducts an empirical study on the relationship between air pollution and people’s happiness. The result indicates that with the increase of air pollution, the individual happiness declines significantly; the impact of air pollution on happiness is subject to significant heterogeneity with greater impact on low-income people and the male and rural residents; according to our estimation of the happiness pricing of air pollution, residents’ willingness to pay for the abatement of air pollution (NO2) by 1 ug/m3 is RMB 1,144; under equivalent conditions, the willingness of Chinese residents to pay for pollution abatement remains significantly lower than their Western peers; the authors discovered that air pollution affects not only residents’ health but their psychological happiness as well.

Keywords: air pollution, happiness willingness to pay, LSA (Life Satisfaction Approach)

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