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Valuing the environment: Happiness and willingness-to-pay

Author

Listed:
  • Cheng, Zhiming
  • Wang, Ben

Abstract

This paper examines the impacts of subjective and objective measures of environmental quality on happiness and willingness to pay higher prices in China. We find that a higher level of happiness is associated with better air quality, but not necessarily with better water quality. The government can encourage willingness to pay for the former, but can only substitute it for the latter. Although perceived environmental quality is important for willingness-to-pay, it plays little role in rating happiness. However, a more highly perceived government effort increases both people’s life satisfaction and willingness-to-pay.

Suggested Citation

  • Cheng, Zhiming & Wang, Ben, 2015. "Valuing the environment: Happiness and willingness-to-pay," MPRA Paper 64676, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64676
    as

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    References listed on IDEAS

    as
    1. Xingmin Shi, 2015. "Factors Influencing the Environmental Satisfaction of Local Residents in the Coal Mining Area, China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(1), pages 67-77, January.
    2. Li, Zhengtao & Folmer, Henk & Xue, Jianhong, 2014. "To what extent does air pollution affect happiness? The case of the Jinchuan mining area, China," Ecological Economics, Elsevier, vol. 99(C), pages 88-99.
    3. Russell Smyth & Ingrid Nielsen & Qingguo Zhai & Tiemin Liu & Yin Liu & C.Y. Tang & Zhihong Wang & Zuxiang Wang & Juyong Zhang, 2008. "Environmental Surroundings And Personal Well-Being In Urban China," Monash Economics Working Papers 32/08, Monash University, Department of Economics.
    4. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    China; happiness; willingness-to-pay; environmental issues;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • 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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