The Life Satisfaction Approach to Environmental Valuation

By Bruno S. Frey, Simon Luechinger, Alois Stutzer. Social Science Research Network, 2010

260 citations recorded by the source corpus.

In many countries environmental policies and regulations are implemented to improve environmental quality and thus individuals’ well-being. However, how do individuals value the environment? In this paper, we review the Life Satisfaction Approach (LSA) representing a new non-market valuation technique. The LSA builds on the recent development of subjective well-being research in economics and takes measures of reported life satisfaction as an empirical approximation to individual welfare. Micro-econometric life satisfaction functions are estimated taking into account environmental conditions along with income and other covariates. The estimated coefficients for the environmental good and income can then be used to calculate the implicit willingness-to-pay for the environmental good.

Subfields: Economics and Econometrics, General Decision Sciences

View Paper: https://www.semanticscholar.org/paper/b4eca80e1991afc1f3f6a0c60761bc86e7df6bc5

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Citations in the corpus

Estimating the cost of air pollution in South East Queensland: An application of the life satisfaction non-market valuation approach (2013, background): “While there is growing evidence to support the suitability of individual’s responses to life satisfaction questions for the purpose of estimating non-market values (Frey et al., 2010), some potential limitations remain.”
The relationship between well-being and commuting revisited: Does the choice of methodology matter? (2014, methodology): “However, as shown by Frey et al. (2009), Luechinger (2009), and Luechinger and Raschky (2009) for example, the ratios of the coefficients in the ordered model can be used to evaluate the trade-off between commuting time and income using the so-called ‘life satisfaction approach’.”
Recent Advances in the Economics of Individual Subjective Well-Being (2010, background): “Moreover, there is no reason to expect strategic answering behavior.18 17 A review of this approach is provided in Frey et al. (2010).”
What have economists learned about valuing nature? A review essay (2013, background): “Another promising line of research attempts to value nature based on a life satisfaction approach (Frey et al., 2010).”
Does happiness data say urban parks are worth it? (2018, background): “As planners and policy makers have become concerned about changes in environmental quality, growing attention has been paid to estimating the monetary value of environmental amenities (Frey et al., 2010).”