Subjective Well-Being and Air Quality in Germany

Maike Schmitt

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This paper analyses the relation between air quality and individual life satisfaction in Germany. Life satisfaction data from the German socio-economic panel is connected with daily county pollution in terms of carbon monoxide, nitrogen dioxide and ozone from 1998 to 2008. The assumed microeconometric happiness function is estimated considering individual fixed effects. Ozone has a significant negative impact on life satisfaction. The effect of carbon monoxide as well as nitrogen dioxide is not significant. Moreover, I found that people with environmental worries are more affected by ozone pollution. This was not the case for people with a bad health status. Using the marginal rate of substitution between income and air pollution, it is calculated that an increase of one µg/m³ in average county ozone has to be compensated by an increase of € 11.33 in monthly net household income to hold an average individual's life satisfaction constant.

Date: 2013
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Published in Journal of Contextual Economics : Schmollers Jahrbuch 2 (2013) : pp. 275-286

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:155646

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