How big a problem is noise pollution? A brief happiness analysis by a perturbable economist

Weinhold, Diana (2008): How big a problem is noise pollution? A brief happiness analysis by a perturbable economist.

Abstract

This paper approaches the question of the costs of everyday residential noise pollution by examining a series of ‘happiness regressions.’ We control for the possibility that an unobservable characteristic (which we denote ‘complainer type’) may lead people both to complain more and cause them to declare themselves to be less happy. We further control for the possibility that a standard estimate of the marginal utility of income may suffer from endogeneity and will be under-estimated if ‘effort’ is not adequately taken into account. We find perceived noise pollution to exert a negative and highly significant effect on happiness. We then calculate the required income transfer to compensate for the noise and find the costs of noise pollution to be on the order of €106 per month per household.

• Item Type: MPRA Paper
• Language: English
• Keywords: happiness; hedonic regression; noise pollution
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand

References

Baranzini, Andrea and Jose V. Ramirez, “Paying for Quietness. The Impact of Noise on Geneva Rents” Urban Studies, Vol. 42, No. 4, pp. 1-14, April 2005

Carson, Richard, Nicholas E. Flores and Norman F. Meade, “Contingent Valuation: Controversies and Evidence" Environmental and Resource Economics, 2001

Clark, Andrew and Andrew Oswald, “A simple statistical method for measuring how life events affect happiness” Unpublished manuscript, University of Warwick, January 2002

Day, Brett, Ian Bateman and Iain Lake, “Beyond implicit prices: recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model”, Environmental and Resource Economics, Volume 37, Number 1 May, 2007 pp. 211-232

Diaz-Serrano, Luis, “Housing Satisfaction, Homeownership and Housing Mobility: A Panel Data Analysis for Twelve EU Countries” IZA Discussion Paper No. 2318, September 2006

Di Tella, Rafael and Robert MacCulloch, “Some Uses of Happiness Data in Economics” Journal of Economic Perspectives Vol. 20(1) Winter 2006 pp.25-46

Easterlin, Richard A. "Does economic growth improve the human lot? Some empirical evidence." In Nations and Households in Economic Growth: Essays in Honor of Moses Abramowitz, by Paul A David and Melvin W. Reder. New York: Academic Press, Inc., 1974.

European Foundation for the Improvement of Living and Working Conditions and Wissenschaftszentrum Berlin fuer Sozialforschung, European Quality of Life Survey, 2003 [computer file]. Colchester, Essex: UK Data Archive [distributor], February 2006. SN: 5260.

Frey, Bruno S., Simon Leunchinger and Alois Stutzer, “Valuing public goods: the life satisfaction approach” CESifo working paper no. 1158, March 2004

Galilea, P. and Juan de Dios Ortuzar, “Valuing noise level reductions in a residential location context,” Transportation Research Part D 10 (2005) 305–322

Gilbert, Daniel Stumbling on Happiness Knopf, 2006

Layard, Richard, G. Mayraz and S. Nickell, “The marginal utility of income” Journal of Public Economics 92, pp.1846-1857, 2008

Lu, Max , “Determinants of Residential Satisfaction: Ordered Logit vs. Regression Models”, Growth and Change 30, 1999, pp.264-287

Nelson, Jon P., “Meta-analysis of airport noise and hedonic property values: problems and prospects” Journal of Transport Economics and Policy, January 2004.

Oswald, Andrew and David Blanchflower, “Is Well-Being U-Shaped over the Life Cycle?" Social Science & Medicine, 2008, 66(6), 1733-1749

Oswald, Andrew and Nattavudh Powdthavee, “Death, Happiness, and the Calculation of Compensatory Damages" (draft, 2007), forthcoming Journal of Legal Studies

Stansfeld, S A, B Berglund, C Clark, I Lopez-Barrio, P Fischer, E Öhrström, MMHaines, J Head, S Hygge, I van Kamp, B F Berry, “Aircraft and road traffic noise and children’s cognition and health: a cross-national study”, The Lancet Vol. 365 June 4, 2005

Stevenson, Betsy and Justin Wolfers, “Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox,” Unpublished manuscript, University of Pennsylvania Wharton School of Business, May 9, 2008

Van Praag, Bernard M.S. and Barbara E. Baarsma, “Using Happiness Surveys to Value Intangibles: The Case of Airport Noise” The Economic Journal, Volume 115 Issue 500 Page 224-246, January 2005

Walters, A.A. (1975): Noise and Prices, Oxford University Press, London.

Wardman, Mark and Abigail Bristow, “Valuations of aircraft noise: experiments in stated preference” Environmental and Resource Economics, Volume 39, Number 4, April 2008

Yang Yang, "Social Inequalities in Happiness in the U.S. 1972-2004: An Age-Period-Cohort Analysis." American Sociological Review 73:204-226, 2008