Can Smog Make Us Unhappy? Effects of Perceived and Objective Air Quality on Subjective Well-being

The study aims to explore the interrelation of perceived air pollution and objective air pollution in the context of various subjective wellbeing (SWB) measures. An original survey data is used, and matched with exogenous levels of PM2.5 pollution in one of Warsaw’s city districts, to capture the short-term exposure and immediate SWB assessments. The log-linear analysis and the Two-Stage Conditional Maximum Likelihood estimations have found both the perceived and objective air pollution to have a negative effect on reported life satisfaction. Using the instrumental variable approach, the hypothesis of endogeneity of perceived pollution to SWB is rejected.