Environment and Happiness: New Evidence for Spain

This paper explores the relationship between air pollution, climate and reported subjective well-being (or happiness) in Spanish regions. The results show that, after controlling for most of the socio-economic variables affecting happiness, there are still significant regional differences in subjective well-being. Evidence also suggests that climate and air pollution variables play a significant role in explaining these regional differences in happiness. The analysis also allows us to calculate the monetary value of air quality and climate, deriving the average marginal rate of substitution between income and air quality and climate for the Spanish regions.