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Preferences over Prosperity and Pollution: Environmental Valuation based on Happiness Surveys
Author(s) -
Welsch Heinz
Publication year - 2002
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/1467-6435.00198
Subject(s) - prosperity , happiness , pollution , economics , air pollution , valuation (finance) , per capita , air quality index , environmental quality , marginal utility , natural resource economics , per capita income , public economics , economic growth , geography , political science , microeconomics , finance , sociology , ecology , biology , population , chemistry , demography , organic chemistry , meteorology , law
This paper uses cross–national data from happiness surveys, jointly with data on per capita income and pollution, to examine how self–reported well–being varies with prosperity and environmental conditions. This approach allows us to show that citizens care about prosperity and the environment, and to calculate the trade–off people are willing to make between them. The paper finds that the effect of urban air pollution on subjective well–being shows up as a considerable monetary valuation of improved air quality. For instance, a representative German citizen would need to be given more than 1900 $ per year in order to accept the typical urban air pollution level prevailing in Japan. The subjective marginal valuation of air pollution is compared with marginal abatement costs from the literature.