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USING HAPPINESS DATA FOR ENVIRONMENTAL VALUATION: ISSUES AND APPLICATIONS
Author(s) -
Welsch Heinz,
Kühling Jan
Publication year - 2009
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/j.1467-6419.2008.00566.x
Subject(s) - happiness , economics , environmental quality , valuation (finance) , public economics , environmental standard , econometrics , environmental economics , political science , law , finance
In addition to standard methods of environmental valuation, a novel approach has recently emerged which models individuals' self‐rated happiness as a function of their incomes and the prevailing environmental conditions. The estimated relationship is used to calculate the trade‐off people would be willing to make between income and environmental conditions, i.e. the increase in income necessary to compensate individuals for any given decline in environmental quality. While the basic idea is simple, the theoretical and empirical details may be complex, and they may vary from application to application. This paper discusses the relevant conceptual and methodological issues and reviews applications to air and water pollution, noise nuisance, climate parameters, and natural hazards.