Impact of Climate Change on the Subjective Well-Being of Households in Russia

Abstract

An analysis is performed for the impact of climate change on life satisfaction among households. The dependence of individual well-being on regional climatic parameters is quantitatively assessed. It is hypothesized that the self-reported life satisfaction among participants of panel surveys generally reflects individuals’ rational views, which can be interpreted as values of an individual utility function, whose parameters can, in turn, be estimated using a regression model. Econometric estimates of the parameters of the individual “happiness function” are made using ordered probit regression, from Rosstat data and the primary results of a nongovernmental monitoring survey of economic welfare and health of individuals and households in the Russian Federation (the Russian Longitudinal Monitoring Survey-Higher School of Economics (RLMS-HSE)). It is shown that the climate factor has a significant impact on the subjective well-being of respondents, which puts climate on par with other, more conventional factors of analysis, such as income, employment, health, quality of potable water and air, etc. The results of this study can be used in economic assessments of the implications of climate change and to develop of programs aimed at preventing such change.