Pain at the pump: Gasoline prices and subjective well-being

Casey Boyd-Swan, Chris Herbst

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

In recent years, there has been growing interest in the health implications of rising gasoline prices. This paper considers the impact of gasoline prices on subjective well-being, as captured by survey questions on happiness and life satisfaction. Using rich data from the DDB Worldwide Communications Life Style™ survey, we document a negative relationship between gasoline prices and self-reported life satisfaction over the period 1985-2005. The estimated reduction in well-being, moreover, is found to be nearly twice as large among groups of likely car owners. Interestingly, although rising gasoline prices lead to an immediate deterioration in subjective well-being, analyses of lagged prices suggest that well-being almost fully rebounds 1. year later and changes very little each year thereafter. Our contemporaneous estimates imply that rising gasoline prices generate well-being losses comparable to faltering labor market conditions, and likely offset some of the physical health benefits found in previous research.

Original languageEnglish (US)
Pages (from-to)160-175
Number of pages16
JournalJournal of Urban Economics
Volume72
Issue number2-3
DOIs
StatePublished - Sep 1 2012

Keywords

  • Gasoline prices
  • Happiness
  • Health
  • Subjective well-being

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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