Thursday, September 20, 2012

Valuing public goods using happiness data: The case of air quality

► I present a method for valuing a time-varying local public good: air quality.
► People interviewed on days with worse local air pollution report lower happiness.
► People with higher incomes report higher levels of happiness.
► Together these two concepts yield the tradeoff between income and air quality.
► A one standard deviation drop in air quality makes people worse off by about $40.

by Arik Levinson E-mail the corresponding author, Georgetown University and NBER
Volume 96, Issues 9–10; October, 2012; Pages 869–880
Keywords: Willingness to pay; Stated well-being; Pollution; Compensating differential

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