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

Casey Boyd-Swan and Chris M. Herbst

Journal of Urban Economics, 2012, vol. 72, issue 2, 160-175

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.

Keywords: Gasoline prices; Subjective well-being; Happiness; Health (search for similar items in EconPapers)
JEL-codes: I1 R2 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:72:y:2012:i:2:p:160-175

DOI: 10.1016/j.jue.2012.05.002

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