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

Ecological Economics

Volumn 71, Issue 1, 2011, Pages 211-219

  Menz, Tobias ^a  

^a UNIVERSITY OF OLDENBURG   (Germany)

Author keywords

Adaptation; Environmental quality; Habituation; Happiness; Life satisfaction; Marginal rate of substitution; Non market valuation; Well being

Indexed keywords

ABATEMENT COST; ATMOSPHERIC POLLUTION; DATA SET; ENVIRONMENTAL QUALITY; HABITUATION; PARTICULATE MATTER; POLLUTION TAX; VALUATION;

EID: 80055040186     PISSN: 09218009     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ecolecon.2011.09.012     Document Type: Article

References (56)

1. Alberini A., Krupnick A. Air quality and episodes of acute respiratory illness in Taiwan cities: evidence from survey data. Journal of Urban Economics 1998, 44:68-92.
2. Bayer P., Keohane N., Timmins C. Migration and hedonic valuation: the case of air quality. Journal of Environmental Economics and Management 2009, 58(1):1-14.
3. Bell P.A., Greene T.C., Fisher J.D., Baum A. Environmental Psychology 2001, Harcourt College Publishers, Orlando. fifth ed.
4. Bolle F., Kemp S. Can we compare life satisfaction between nationalities? Evaluating actual and imagined situations. Social Indicators Research 2009, 90(3):397-408.
5. Brickman P., Campbell D. Hedonic Relativism and Planning the Good Society. Adaptation-Level Theory: A Symposium 1971, 287-302. Academic Press, New York. M.H. Appley (Ed.).
6. Chattopadhyay S. Estimating the demand for air quality: new evidence based on the Chicago housing market. Land Economics 1999, 75(1):22-38.
7. Choi I. Unit root tests for panel data. Journal of International Money and Finance 2001, 20:249-272.
8. Di Tella R., Haisken-De New J., MacCulloch R. Happiness adaptation to income and to status in an individual panel. Journal of Economic Behavior and Organization 2010, 76(3):834-852.
9. Diener E., Suh E.M., Lucas R.E., Smith H.L. Subjective well-being: three decades of progress. Psychological Bulletin 1999, 125:276-302.
10. Easterlin R. Does Economic Growth Improve the Human Lot? Some Empirical Evidence. Nations and Households in Economic Growth 1974, 89-125. Academic Press, New York. P.A. David, M.W. Reder (Eds.).
11. Evans G.W., Jacobs S.V., Frager N.B. Adaptation to air pollution. Journal of Environmental Psychology 1982, 2:99-108.
12. Ferreira S., Moro M. On the use of subjective well-being data for environmental valuation. Environmental and Resource Economics 2010, 46(3):249-273.
13. Ferrer-i-Carbonell A., Frijters P. How important is methodology for the estimates of the determinants of happiness?. The Economic Journal 2004, 114:641-659.
14. Ferrer-i-Carbonell A., van Praag B.M.S. Do People Adapt to Changes in Income and other Circumstances: The discussion is not finished yet. Working Paper IAE-CSIC 2008, ICREA and Institut d'Analisi Economica, Barcelona.
15. Frederick S., Loewenstein G. Hedonic Adaptation. Well Being: The Foundations of Hedonic Psychology 1999, 302-329. Russel Sage, New York. D. Kahneman, E. Diener, N. Schwarz (Eds.).
16. Frey B.S., Luechinger S., Stutzer A. The life satisfaction approach to environmental valuation. Annual Review of Resource Economics 2010, 2:139-160.
17. Granger C., Newbold P. Spurious regressions in econometrics. Journal of Econometrics 1974, 2:111-120.
18. Hackney J.D., Linn W.S., Buckley R.D., Hislop H.J. Studies in adaptation to ambient oxidant air pollution: effects of ozone exposure in Los Angeles residents vs. new arrivals. Environmental Health Perspectives 1976, 18:141-146.
19. Helson H. Adaptation level as frame of reference for prediction of psychophysical data. The Journal of Psychology 1947, 60(1):1-29.
20. Helson H. Adaptation level as a basis for a quantitative theory of frames of reference. Psychological Review 1948, 55(6):297-313.
21. Helson H. Adaptation-Level Theory. An Experimental and Systematic Approach to Behavior 1964, Harper and Row, New York.
22. Heston A., Summers R., Aten B. Penn World Table Version 6.3 2009, Center for International Comparisons at the University of Pennsylvania, Philadelphia.
23. Im K.S., Pesaran M.H., Shin Y. Testing for unit roots in heterogeneous panels. Journal of Econometrics 2003, 115:53-74.
24. Int Panis L., Spadaro J., Rabl A. Validation of the Methodology of Externe, Final Report to Work Package 5, Externalities of Energy: Extension of Accounting Framework and Policy Applications (ExternE-Pol) 2004, European Commission, Brussels.
25. Kahneman D. Objective Happiness. Well-Being: Foundations of Hedonic Psychology 1999, 3-25. Russell Sage Foundation Press, New York. D. Kahneman, E. Diener, N. Schwarz (Eds.).
26. Katsouyanni K., Gryparis A., Samoli E. Short-term effects of air pollution on health. Encyclopedia of Environmental Health 2011, 2011:51-60.
27. Levin A., Lin C.F., Chu C. Unit root tests in panel data: asymptotic and finite sample properties. Journal of Econometrics 2002, 108:1-25.
28. Levinson A. Valuing Public Goods Using Happiness Data: The Case of Air Quality. NBER Working Paper 15516 2009, National Bureau of Economic Research, Cambridge.
29. MacKerron G., Mourato S. Life satisfaction and air quality in London. Ecological Economics 2009, 68:1441-1453.
30. Maddala G., Wu S. A comparative study of unit root tests and a new simple test. Oxford Bulletin of Economics and Statistics 1999, 61:631-652.
31. Marshall M.G., Jaggers K., Gurr T.R. Political Regime Characteristics and Transitions, 1800-2007 URL:, Cited 23 Nov 2009. Center for Systemic Peace, Vienna (USA). http://www.systemicpeace.org/polity/polity4htm.
32. Menz T., Welsch H. Population aging and environmental preferences in OECD countries: the case of air pollution. Ecological Economics 2010, 69:2582-2589.
33. Menz, T., Welsch, H., in press. Life-Cycle and Cohort Effects in the Valuation of Air Quality: Evidence from Subjective Well-Being Data. Land Economics.
34. OECD OECD StatExtracts URL:, Cited 23 Nov 2009. Organization for Economic Co-Operation and Development, Paris. http://stats.oecd.org/index.aspx.
35. Owen A.L., Videras J., Willemsen C. Democracy, participation, and life satisfaction. Social Science Quarterly 2008, 89(4):987-1005.
36. Pedroni P. Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics 1999, 61:653-678.
37. Pollak R.A. Habit formation and dynamic demand functions. Journal of Political Economy 1970, 78(4):745-763.
38. Powdthavee N. How much does money really matter? Estimating the causal effect of income on happiness. Empirical Economics 2009, 39(1):77-92.
39. Rehdanz K., Maddison D. Climate and happiness. Ecological Economics 2005, 52:111-125.
40. Sandvik E., Diener E., Seidlitz L. Subjective well-being: the convergence and stability of self-report and non-self-report measures. Journal of Personality 1993, 61(3):317-342.
41. Schwartz J. Long-term effects of particulate air pollution on human health. Encyclopedia of Environmental Health 2011, 2011:520-527.
42. Scitovsky T. The Joyless Economy: The Psychology of Human Satisfaction 1976, Oxford University Press, New York.
43. Shedler J., Mayman M., Manis M. The illusion of mental health. The American Psychologist 1993, 48(11):1117-1135.
44. Smith V.K. Reflections on the literature. Review of Environmental Economics and Policy 2008, 2(2):292-308.
45. Smith V.K., Huang J.-C. Can markets value air quality? A meta-analysis of hedonic property value models. Journal of Political Economy 1995, 103(1):209-227.
46. Smyth R., Nielsen I., Zhai Q., Liu T., Liu Y., Tang C., Wang Zh., Wang Zu., Zhang J. A study of the impact of environmental surroundings on personal well-being in urban China using a multi-item well-being indicator. Population and Environment 2011, 32:353-375.
47. Tidblad J., Kucera V. Impacts on Building Materials. Environmental External Costs of Transport 2001, 59-72. Springer, Berlin. R. Friedrich, P. Bickel (Eds.).
48. United Nations World Population Prospects, The 2006 Revision 2007, United Nations - Population Division, New York.
49. Van Praag B., Baarsma B. Using happiness surveys to value intangibles: the case of airport noise. The Economic Journal 2005, 52:111-125.
50. Veenhoven R. Happiness in Nations: Subjective Appreciation of Life in 56 Nations 1946-1992 1993, Erasmus University Press, Rotterdam.
51. Veenhoven R. World Database of Happiness URL:, Erasmus University, Rotterdam. http://www2.eur.nl./fsw/research/happiness.
52. Wattkis P., Pye S., Holland M. Baseline Scenarios for Service Contract for carrying out cost-benefit analysis of air quality related issues, in particular in the clean air for Europe (CAFE) program, Reference Number: AEAT/ED51014/ Baseline Issue 5 2005, AEA Technology Environment, Didcot Oxon.
53. Welsch H. Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys. Kyklos 2002, 55:473-494.
54. Welsch H., Kühling J. Using happiness data for environmental valuation: issues and applications. Journal of Economic Surveys 2009, 23:385-406.
55. WHO WHO Air Quality Guidelines Global Update 2005. Report on a Working Group Meeting 18-20 October in Bonn 2005, World Health Organization, Geneva.
56. World Bank World Development Indicators 2009 2009, The World Bank, Washington D.C.