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Do people habituate to air pollution? Evidence from international life satisfaction data

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  • Menz, Tobias

Abstract

Air pollution constitutes one of the main environmental problems in many countries. This paper uses the life satisfaction approach to environmental valuation (LSA) to investigate whether individuals habituate to air pollution and if a potential habituation effect influences the marginal rate of substitution between air quality and income. My estimation results, based on a data set of 48 countries spanning the period 1990 to 2006, indicate that individuals do not habituate to pollution with particulate matter. Rather, I find that even past pollution levels reduce current utility. This effect tends to increase the value of pollution abatement.

Suggested Citation

  • Menz, Tobias, 2011. "Do people habituate to air pollution? Evidence from international life satisfaction data," Ecological Economics, Elsevier, vol. 71(C), pages 211-219.
    • Handle: RePEc:eee:ecolec:v:71:y:2011:i:c:p:211-219
    DOI: 10.1016/j.ecolecon.2011.09.012
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    More about this item

    Keywords

    Environmental quality; Non-market valuation; Marginal rate of substitution; Happiness; Life satisfaction; Well-being; Habituation; Adaptation;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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