Well-Being and the Environment

Abstract

Over the past quarter century, a growing literature has found that human subjective well-being (SWB) significantly depends on the quality of the natural environment. Air pollution and global warming in particular affect life satisfaction negatively, whereas access to green spaces, but also one's own environmentally friendly behaviors, are associated with greater satisfaction. This article discusses the conceptual and empirical frameworks and recent topical issues of the economics of well-being and the environment, including the concept, measurement, and correlates of SWB, recent developments in using SWB data for environmental valuation, the well-being effects of carbon pricing, and the link between well-being and proenvironmental behaviors. Taking SWB as a measure of utility, the article highlights deviations from the standard economic model uncovered by studies of SWB and the environment.