Some Lessons from Happiness Economics for Environmental Sustainability

  • Heinz WelschEmail author
Part of the Happiness Studies Book Series book series (HAPS)


This chapter discusses economic maximization from the perspective of environmental sustainability. It starts by discussing happiness as an empirically applicable approximation to the traditional economic notions of utility and preference. It then shows how the economic analysis of happiness has uncovered previously neglected channels through which the current styles of economic behavior affect environmental integrity and sustainability. Finally, the chapter briefly discusses the ways in which a better understanding of the factors and mechanisms underlying happiness may contribute to forming a more environmentally sustainable lifestyle.


Life Satisfaction Environmental Friendliness Consumption Externality Happiness Research Experienced Utility 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Andreoni J (1990) Impure altruism and donations to public goods: a theory of warm-glow giving. Econ J 100:464–477CrossRefGoogle Scholar
  2. Carroll N, Frijters P, Shields MA (2009) Quantifying the costs of drought: new evidence from life satisfaction data. J Population Econ 22:445–461CrossRefGoogle Scholar
  3. Clark AE, Frijters P, Shields MA (2008) Relative income, happiness and utility: an explanation for the Easterlin paradox and other puzzles. J Econ Lit 46:95–144CrossRefGoogle Scholar
  4. Deci EL, Ryan RM (2000) The “what” and “why” of goal pursuits: human needs and the self-determination of behavior. Psychol Inq 11:227–268CrossRefGoogle Scholar
  5. Diener E, Suh EM, Lucas RE, Smith HL (1999) Subjective well-Being: three decades of progress. Psychol Bull 125:276–302CrossRefGoogle Scholar
  6. Di Tella R, MacCulloch R, Oswald A (2001) Preferences over inflation and unemployment: evidence from surveys of happiness. Am Econ Rev 91:335–341CrossRefGoogle Scholar
  7. Ferreira S, Moro M (2010) On the use of subjective well-being data for environmental valuation. Environ Resour Econ 46:249–273CrossRefGoogle Scholar
  8. Frey BS, Stutzer A (2002a) Happiness and economics: how the economy and institutions affect well-being. Princeton University Press, Princeton and OxfordGoogle Scholar
  9. Frey BS, Stutzer A (2002b) What can economists learn from happiness research? J Econ Lit 40:402–435CrossRefGoogle Scholar
  10. Frey BS, Stutzer A (2004) Economic consequences of mispredicting utility, Working Paper No. 218. Institute for Empirical Research in Economics, University of ZurichGoogle Scholar
  11. Frey BS, Luechinger S, Stutzer A (2009) The life satisfaction approach to valuing public goods: the case of terrorism. Public Choice 138:317–345CrossRefGoogle Scholar
  12. Gilbert DT, Pinel EC, Wilson TD, Blumberg SJ, Wheatley TP (1998) Immune neglect: a source of durability bias in affective forecasting. J Pers Soc Psychol 75:617–638CrossRefGoogle Scholar
  13. Israel D, Levinson A (2003) Examining the relationship between household satisfaction and pollution. Manuscript, Indiana State University, IndianaGoogle Scholar
  14. Kahneman D (1999) Objective happiness. In: Kahneman D, Diener E, Schwarz N (eds) Well being: the foundations of hedonic psychology. Russell Sage Foundation, New York, pp 3–25Google Scholar
  15. Kahneman D, Wakker PP, Sarin R (1997) Back to Bentham? Explorations of experienced utility. Quart J Econ 112:375–405CrossRefGoogle Scholar
  16. Kasser T, Ryan RM (1996) Further examining the American dream: differential correlates of intrinsic and extrinsic goals. Pers Soc Psychol Bull 22:280–287CrossRefGoogle Scholar
  17. Layard R (2006) Happiness and public policy: a challenge to the profession. Econ J 116:C24–C33CrossRefGoogle Scholar
  18. Loewenstein G, O’Donoghue T, Rabin M (2003) Projection bias in predicting future utility. Quart J Econ 118:1209–1248CrossRefGoogle Scholar
  19. Luechinger S (2009) Valuing air quality using the life satisfaction approach. Econ J 119:482–515CrossRefGoogle Scholar
  20. Luechinger S, Raschky PA (2009) Valuing flood disasters using the life satisfaction approach. J Public Econ 93:620–633CrossRefGoogle Scholar
  21. MacKerron G, Mourato S (2009) Life satisfaction and air quality in London. Ecol Econ 68:1441–1453CrossRefGoogle Scholar
  22. Maslow A (1968) Towards a psychology of being, 2nd edn. Van Nostrand, New YorkGoogle Scholar
  23. Meier S, Stutzer A (2008) Is volunteering rewarding in itself? Economica 75:39–59Google Scholar
  24. Menz T, Welsch H (2010) Population aging and environmental preferences in OECD countries: the case of air pollution. Ecol Econ 69:2582–2589CrossRefGoogle Scholar
  25. Menz T, Welsch H (2011) Life-cycle and cohort effects in the valuation of air pollution: evidence from subjective well-being data. Land Economics 88:300–325Google Scholar
  26. Rehdanz K, Maddison D (2005) Climate and happiness. Ecol Econ 52:111–125CrossRefGoogle Scholar
  27. Rogers C (1961) On becoming a person. Houghton Mifflin, BostonGoogle Scholar
  28. Sent EM (2004) Behavioral economics: how psychology made its (limited) way back into economics. Hist Polit Econ 36:735–760CrossRefGoogle Scholar
  29. Stutzer A, Frey BS (2007) What happiness research can tell us about self-control problems and utility misprediction. In: Frey BS, Stutzer A (eds) Economics and psychology: a promising new cross-disciplinary field. MIT Press, Cambridge, pp 169–195Google Scholar
  30. van Praag B, Baarsma B (2005) Using happiness surveys to value intangibles: the case of airport noise. Econ J 52:111–125Google Scholar
  31. Veenhoven R (1997) Advances in understanding happiness. Revue Quebecoise de Psychologie 18:29–74Google Scholar
  32. Welsch H (2002) Preferences over prosperity and pollution: environmental valuation based on happiness surveys. Kyklos 55:473–494CrossRefGoogle Scholar
  33. Welsch H (2006) Environment and happiness: valuation of air pollution using life satisfaction data. Ecol Econ 58:801–813CrossRefGoogle Scholar
  34. Welsch H (2007a) Environmental welfare analysis: a life satisfaction approach. Ecol Econ 62:541–551CrossRefGoogle Scholar
  35. Welsch H (2007b) Macroeconomics and life satisfaction: revisiting the “misery index”. J Appl Econ 10:237–251Google Scholar
  36. Welsch H (2008a) The social costs of civil conflict: evidence from surveys of happiness. Kyklos 61:320–340CrossRefGoogle Scholar
  37. Welsch H (2008b) The welfare costs of corruption. Appl Econ 40:1839–1849CrossRefGoogle Scholar
  38. Welsch H, Kühling J (2010) Pro-environmental behavior and rational consumer choice: evidence from surveys of life satisfaction. J Econ Psychol 31:405–420CrossRefGoogle Scholar
  39. Welsch H, Kühling J (2011) Are pro-environmental consumption choices utility maximizing? The role of learning. Ecol Econ 72:75–87CrossRefGoogle Scholar
  40. Wilson TD, Gilbert DT (2003) Affective forecasting. In: Zanna MP (ed) Advances in experimental social psychology, vol 35. Elsevier, New York, pp 345–411Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.Department of EconomicsCarl von Ossietzky UniversitätOldenburgGermany

Personalised recommendations