IDEAS home Printed from https://ideas.repec.org/p/ags/aare13/152133.html
   My bibliography  Save this paper

Estimating the cost of air pollution in South East Queensland: An application of the life satisfaction non-market valuation approach

Author

Listed:
  • Ambrey, Christopher L.
  • Chan, Andrew Yiu-Chung
  • Fleming, Christopher M.

Abstract

Making use of data from the Household, Income and Labour Dynamics in Australia (HILDA) survey coupled with air pollution data generated by The Air Pollution Model (TAPM), this paper employs the life satisfaction approach to estimate the cost of air pollution from human activities in South East Queensland. This paper offers at least three improvements over much of the existing literature: (1) within- (as opposed to cross-) country variations in air pollution are considered; (2) very high resolution air pollution data is employed; and (3) weather variables are included as controls within the life satisfaction function. A strong negative relationship is found between ambient concentrations of PM10 and life satisfaction, yielding a substantial willingness-to-pay for pollution reduction.

Suggested Citation

  • Ambrey, Christopher L. & Chan, Andrew Yiu-Chung & Fleming, Christopher M., 2013. "Estimating the cost of air pollution in South East Queensland: An application of the life satisfaction non-market valuation approach," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152133, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare13:152133
    DOI: 10.22004/ag.econ.152133
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/152133/files/CP%20Ambrey%20Fleming.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.152133?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pischke, Jorn-Steffen, 2011. "Money and Happiness: Evidence from the Industry Wage Structure," CEPR Discussion Papers 8409, C.E.P.R. Discussion Papers.
    2. Welsch, Heinz, 2007. "Environmental welfare analysis: A life satisfaction approach," Ecological Economics, Elsevier, vol. 62(3-4), pages 544-551, May.
    3. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
    4. Krueger, Alan B. & Schkade, David A., 2008. "The reliability of subjective well-being measures," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1833-1845, August.
    5. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    6. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, March.
    7. Jörn-Steffen Pischke & Hannes Schwandt, 2012. "A Cautionary Note on Using Industry Affiliation to Predict Income," NBER Working Papers 18384, National Bureau of Economic Research, Inc.
    8. Luechinger, Simon, 2010. "Life satisfaction and transboundary air pollution," Economics Letters, Elsevier, vol. 107(1), pages 4-6, April.
    9. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    10. Dominika Parry Dziegielewska & Robert Mendelsohn, 2005. "Valuing Air Quality in Poland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(2), pages 131-163, February.
    11. Susana Ferreira & Mirko Moro, 2010. "On the Use of Subjective Well-Being Data for Environmental Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(3), pages 249-273, July.
    12. Daniel Kahneman & Robert Sugden, 2005. "Experienced Utility as a Standard of Policy Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(1), pages 161-181, September.
    13. Heinz Welsch & Jan Kühling, 2009. "Using Happiness Data For Environmental Valuation: Issues And Applications," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 385-406, April.
    14. Tobias Menz & Heinz Welsch, 2012. "Life-Cycle and Cohort Effects in the Valuation of Air Quality: Evidence from Subjective Well-being Data," Land Economics, University of Wisconsin Press, vol. 88(2), pages 300-325.
    15. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2010. "The Life Satisfaction Approach to Environmental Valuation," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 139-160, October.
    16. Smyth, Russell & Mishra, Vinod & Qian, Xiaolei, 2008. "The Environment and Well-Being in Urban China," Ecological Economics, Elsevier, vol. 68(1-2), pages 547-555, December.
    17. Nattavudh Powdthavee, 2010. "How much does money really matter? Estimating the causal effects of income on happiness," Empirical Economics, Springer, vol. 39(1), pages 77-92, August.
    18. Moro, Mirko & Brereton, Finbarr & Ferreira, Susana & Clinch, J. Peter, 2008. "Ranking quality of life using subjective well-being data," Ecological Economics, Elsevier, vol. 65(3), pages 448-460, April.
    19. Christie, Mike & Hanley, Nick & Warren, John & Murphy, Kevin & Wright, Robert & Hyde, Tony, 2006. "Valuing the diversity of biodiversity," Ecological Economics, Elsevier, vol. 58(2), pages 304-317, June.
    20. Levinson, Arik, 2012. "Valuing public goods using happiness data: The case of air quality," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 869-880.
    21. Stutzer, Alois & Frey, Bruno S., 2012. "Recent Developments in the Economics of Happiness: A Selective Overview," IZA Discussion Papers 7078, Institute of Labor Economics (IZA).
    22. Christopher L. Ambrey & Christopher M. Fleming, 2012. "Valuing Australia's protected areas: A life satisfaction approach," New Zealand Economic Papers, Taylor & Francis Journals, vol. 46(3), pages 191-209, December.
    23. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing scenic amenity using life satisfaction data," Ecological Economics, Elsevier, vol. 72(C), pages 106-115.
    24. Kenneth Y. Chay & Michael Greenstone, 2005. "Does Air Quality Matter? Evidence from the Housing Market," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 376-424, April.
    25. Menz, Tobias, 2011. "Do people habituate to air pollution? Evidence from international life satisfaction data," Ecological Economics, Elsevier, vol. 71(C), pages 211-219.
    26. MacKerron, George & Mourato, Susana, 2009. "Life satisfaction and air quality in London," Ecological Economics, Elsevier, vol. 68(5), pages 1441-1453, March.
    27. Michael Shields & Stephen Wheatley Price & Mark Wooden, 2009. "Life satisfaction and the economic and social characteristics of neighbourhoods," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(2), pages 421-443, April.
    28. Luechinger, Simon & Raschky, Paul A., 2009. "Valuing flood disasters using the life satisfaction approach," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 620-633, April.
    29. Heinz Welsch, 2002. "Preferences over Prosperity and Pollution: Environmental Valuation based on Happiness Surveys," Kyklos, Wiley Blackwell, vol. 55(4), pages 473-494, November.
    30. Menz, Tobias & Welsch, Heinz, 2010. "Population aging and environmental preferences in OECD countries: The case of air pollution," Ecological Economics, Elsevier, vol. 69(12), pages 2582-2589, October.
    31. Brereton, Finbarr & Clinch, J. Peter & Ferreira, Susana, 2008. "Happiness, geography and the environment," Ecological Economics, Elsevier, vol. 65(2), pages 386-396, April.
    32. repec:bla:kyklos:v:55:y:2002:i:4:p:473-94 is not listed on IDEAS
    33. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
    34. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
    35. Welsch, Heinz, 2006. "Environment and happiness: Valuation of air pollution using life satisfaction data," Ecological Economics, Elsevier, vol. 58(4), pages 801-813, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing scenic amenity using life satisfaction data," Ecological Economics, Elsevier, vol. 72(C), pages 106-115.
    2. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing Ecosystem Diversity in South East Queensland: A Life Satisfaction Approach," 2011 Conference, August 25-26, 2011, Nelson, New Zealand 115347, New Zealand Agricultural and Resource Economics Society.
    3. Bertram, Christine & Rehdanz, Katrin, 2015. "The role of urban green space for human well-being," Ecological Economics, Elsevier, vol. 120(C), pages 139-152.
    4. Welsch, Heinz & Ferreira, Susana, 2014. "Environment, Well-Being, and Experienced Preference," International Review of Environmental and Resource Economics, now publishers, vol. 7(3-4), pages 205-239, December.
    5. Christopher Ambrey & Christopher Fleming, 2014. "Public Greenspace and Life Satisfaction in Urban Australia," Urban Studies, Urban Studies Journal Limited, vol. 51(6), pages 1290-1321, May.
    6. Christopher Ambrey & Christopher Fleming, 2014. "Valuing Ecosystem Diversity in South East Queensland: A Life Satisfaction Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(1), pages 45-65, January.
    7. Eleftherios Giovanis, 2019. "Worthy to lose some money for better air quality: applications of Bayesian networks on the causal effect of income and air pollution on life satisfaction in Switzerland," Empirical Economics, Springer, vol. 57(5), pages 1579-1611, November.
    8. Christopher L Ambrey & Christopher M Fleming & Matthew Manning, 2013. "The life satisfaction approach to estimating the cost of crime: An individual's willingness-to-pay for crime reduction," Discussion Papers in Economics economics:201301, Griffith University, Department of Accounting, Finance and Economics.
    9. Ferreira, Susana & Moro, Mirko & Welsch, Heinz, 2024. "Using Life Satisfaction and Happiness Data for Environmental Valuation: An Experienced Preference Approach," IZA Discussion Papers 16718, Institute of Labor Economics (IZA).
    10. Ferreira, Susana & Akay, Alpaslan & Brereton, Finbarr & Cuñado, Juncal & Martinsson, Peter & Moro, Mirko & Ningal, Tine F., 2013. "Life satisfaction and air quality in Europe," Ecological Economics, Elsevier, vol. 88(C), pages 1-10.
    11. Ambrey, Christopher L. & Fleming, Christopher M. & Chan, Andrew Yiu-Chung, 2014. "Estimating the cost of air pollution in South East Queensland: An application of the life satisfaction non-market valuation approach," Ecological Economics, Elsevier, vol. 97(C), pages 172-181.
    12. Knight, S.J; Howley, P.;, 2017. "Can clean air make you happy? Examining the effect of nitrogen dioxide (NO2) on life satisfaction," Health, Econometrics and Data Group (HEDG) Working Papers 17/08, HEDG, c/o Department of Economics, University of York.
    13. García-Mainar, Inmaculada & Montuenga, Víctor M. & Navarro-Paniagua, María, 2015. "Workplace environmental conditions and life satisfaction in Spain," Ecological Economics, Elsevier, vol. 119(C), pages 136-146.
    14. Kopmann, Angela & Rehdanz, Katrin, 2013. "A human well-being approach for assessing the value of natural land areas," Ecological Economics, Elsevier, vol. 93(C), pages 20-33.
    15. Susana Ferreira & Mirko Moro, 2013. "Income and Preferences for the Environment: Evidence from Subjective Well-Being Data," Environment and Planning A, , vol. 45(3), pages 650-667, March.
    16. Juncal Cuñado & Fernando Gracia, 2013. "Environment and Happiness: New Evidence for Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(3), pages 549-567, July.
    17. Pan Zhang & Zhiguo Wang, 2019. "PM 2.5 Concentrations and Subjective Well-Being: Longitudinal Evidence from Aggregated Panel Data from Chinese Provinces," IJERPH, MDPI, vol. 16(7), pages 1-13, March.
    18. Zerrahn, Alexander & Krekel, Christian, 2015. "Sowing the Wind and Reaping the Whirlwind? The Effect of Wind Turbines on Residential Well-Being," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112956, Verein für Socialpolitik / German Economic Association.
    19. Han, Ahram & Ten, Gi Khan & Wang, Shun, 2023. "Gray skies and blue moms: The effect of air pollution on parental life satisfaction," World Development, Elsevier, vol. 163(C).
    20. Welsch, Heinz, 2009. "Implications of happiness research for environmental economics," Ecological Economics, Elsevier, vol. 68(11), pages 2735-2742, September.

    More about this item

    Keywords

    Consumer/Household Economics; Environmental Economics and Policy; International Relations/Trade; Labor and Human Capital;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aare13:152133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.