Understanding Society Scientific Conference 2017, 11-13 July 2017, University of Essex, Colchester, UK
July 13, 2017
Despite the UK meeting EU targets regarding the level of a number of air pollutants, it regularly exceeds one or more of these limits. For example Brixton Road, London exceeded its annual limit of nitrogen dioxide (NO2) in the first five days of 2017. While these extreme peaks in specific locations may not be indicative of the entire country, they do signal a need for increased regulation and awareness of air pollution issues to reduce the economic and health burden of air pollution in the UK. Here we examine the welfare effects from exposure to NO2 on self-reported quality of life. We combine life satisfaction data from the British Household Panel Survey and Understanding Society with detailed NO2 records held by the UK Department for Environment, Food and Rural Affairs. A fixed effects approach was used to benefit from the longitudinal well-being data and instrumental variables regression to account for endogeneity issues. Our results suggest a significant and negative relationship between mean annual ambient NO2 and life satisfaction, and moreover that these effects are substantive and comparable to that of many other factors commonly associated with large well-being effects in the literature to date. For example, our standardised coefficients suggest that the relationship between NO2 and subjective well-being is approximately half that of unemployment, retirement and divorce. This has significance for health, well-being and environmental policy-making both in urban and rural areas, and contributes to the environmental quality literature regarding the impacts of nature on human well-being.