scholarly journals Potential Use of the Life Satisfaction Approach to Value Nonmarket Goods and Services

2019 ◽  
Author(s):  
Cheryl Joy Fernandez ◽  
David Raitzer ◽  
Edimon Ginting
Keyword(s):  
Life Satisfaction ◽  
Goods And Services ◽  
Nonmarket Goods ◽  
Life Satisfaction Approach ◽  
Potential Use

The Life Satisfaction Approach to Environmental Valuation

2017 ◽  
Author(s):  
Christopher Fleming ◽  
Christopher Ambrey
Keyword(s):  
Life Satisfaction ◽  
Market Valuation ◽  
Environmental Damage ◽  
National Account ◽  
Environmental Goods ◽  
Goods And Services ◽  
Market Good ◽  
Non Market Valuation ◽  
Life Satisfaction Approach ◽  
Environmental Goods And Services

The method and practice of placing monetary values on environmental goods and services for which a conventional market price is otherwise unobservable is one of the most fertile areas of research in the field of natural resource and environmental economics. Initially motivated by the need to include environmental values in benefit-cost analysis, practitioners of non-market valuation have since found further motivation in national account augmentation and environmental damage litigation. Despite hundreds of applications and many decades of refinement, shortcomings in all of the techniques remain, and no single technique is considered superior to the others in all respects. Thus, techniques that expand the suite of options available to the non-market valuation practitioner have the potential to represent a genuine contribution to the field. One technique to recently emerge from the economics of happiness literature is the “experienced preference method” or “life satisfaction approach.” Simply, this approach entails the inclusion of non-market goods as explanatory variables within micro-econometric functions of life satisfaction along with income and other covariates. The estimated coefficient for the non-market good yields, first, a direct valuation in terms of life satisfaction and, second, when compared to the estimated coefficient for income, the implicit willingness to pay for the non-market good in monetary terms. The life satisfaction approach offers several advantages over more conventional non-market valuation techniques. For example, the approach does not ask individuals to directly value the non-market good in question, as is the case in contingent valuation. Nor does it ask individuals to make explicit trade-offs between market and non-market goods, as is the case in discrete choice modeling. The life satisfaction approach nonetheless has some potential limitations. Crucially, self-reported life satisfaction must be regarded as a good proxy for an individual’s utility. Furthermore, in order to yield reliable non-market valuation estimates, self-reported life satisfaction measures must: (1) contain information on respondents’ global evaluation of their life; (2) reflect not only stable inner states of respondents, but also current affects; (3) refer to respondents’ present life; and (4) be comparable across groups of individuals under different circumstances. Despite these conditions, there is growing evidence to support the suitability of individual’s responses to life satisfaction questions for non-market valuation. Applications of the life satisfaction approach to the valuation of environmental goods and services to date include the valuation of air quality, airport noise, greenspace, scenic amenity, floods, and drought.

Education as a Positional Good: A Life Satisfaction Approach

2010 ◽  
Vol 103 (3) ◽  
pp. 409-426 ◽  
Author(s):  
Mª del Mar Salinas-Jiménez ◽  
Joaquín Artés ◽  
Javier Salinas-Jiménez
Keyword(s):  
Life Satisfaction ◽  
Positional Good ◽  
Life Satisfaction Approach

scholarly journals Valuing disaster risk reduction neighborhood interventions in informal settlements of Latin American and the Caribbean

PLoS ONE ◽  
2020 ◽  
Vol 15 (11) ◽  
pp. e0242409
Author(s):  
Alejandro Arrieta ◽  
Juan Pablo Sarmiento ◽  
Meenakshi Chabba ◽  
Weiwei Chen
Keyword(s):  
Life Satisfaction ◽  
Risk Reduction ◽  
Latin American ◽  
Disaster Risk Reduction ◽  
Informal Settlements ◽  
Disaster Risk ◽  
Small Towns ◽  
Community Empowerment ◽  
Primary Data ◽  
Life Satisfaction Approach

This study assesses the dollar benefit of a neighborhood approach intervention on disaster risk reduction in small-sized, densely populated, and hazard-prone informal settlements across Latin American and Caribbean countries. We use a life satisfaction approach that assigns a dollar value to gains in wellbeing associated with the neighborhood approach intervention. Our primary data was a survey to a sample of 349 beneficiaries from small towns in Haiti, Guatemala, and Jamaica, and in major cities’ surrounded areas of Peru, Colombia, and Honduras. Out of 14 interventions, we found that community empowerment, physical works in public spaces and urban gardens/food approaches produced a gain of USD1,038 to USD1,241 to individual beneficiaries. Our study suggests a large benefit associated with the neighborhood approach intervention. It also shows that the life satisfaction approach is a promising method for the valuation of non-market and public goods, especially for countries where data on hazards and risks is not available to help monetize risk reductions.

scholarly journals Consumption Changes, Not Income Changes, Predict Changes in Subjective Well-Being

2019 ◽  
Vol 11 (1) ◽  
pp. 64-73
Author(s):  
Gordon D. A. Brown ◽  
John Gathergood
Keyword(s):  
Economic Theory ◽  
Life Satisfaction ◽  
Panel Data ◽  
Consumer Psychology ◽  
Well Being ◽  
Subjective Well Being ◽  
Beneficial Effects ◽  
Goods And Services ◽  
Saving Behavior ◽  
First Time

Does happiness depend on what one earns or what one spends? Income is typically found to have small beneficial effects on well-being. However, economic theory suggests that well-being is conferred not by income but by consumption (i.e., spending on goods and services), and a person’s level of consumption may differ greatly from their level of income due to saving behavior and taxation. Moreover, research within consumer psychology has established relationships between people’s spending in specific categories and their well-being. Here we show for the first time using panel data that changes in life satisfaction are associated with changes in consumption, not changes in income. We also find some evidence that increased conspicuous consumption is more strongly associated with improved well-being than is increased nonconspicuous consumption.

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