Air pollution, heterogeneity, and subjective well-being: Evidence from China's micro survey data

Abstract Previous studies have not paid much attention to the heterogeneous effects of air pollution on subjective well-being. By matching the 2018 China Labour-Force Dynamics Survey data (CLDS2018) with urban air pollution data, we empirically examine the impact of air pollution on subjective well-being across pollution levels, income levels, gender, age, education as well as city size and region. Empirical analysis shows that an increase in air pollution has a negative and statistically significant impact on the well-being and the effect varies considerably across pollution levels, income levels, age, gender, education level, city size and region. Re-estimation using air pollution data released by the U.S. embassy in China shows that the empirical results presented in this paper are robust. After accounting for potential endogeneity and selection bias, PM2.5 continues to have a significant negative impact on the well-being of residents. Our analysis shows that air pollution is an important contributor to the Easterlin paradox, and (in the process of air pollution control) attention needs to be paid to both individual heterogeneity and urban differences.