Sunday, September 27, 2015

Anderson et al. on Traffic and Happiness


"Superstitions, Street Traffic, and Subjective Well-Being" Fee Download 
NBER Working Paper No. w21551

MICHAEL L. ANDERSONU.C. Berkeley - Department of Agricultural and Resource Economics
FANGWEN LUUniversity of California, Berkeley; YIRAN ZHANGRenmin University of China
JUN YANGBeijing Transportation Research Center; PING QINRenmin University of China

Congestion plays a central role in urban and transportation economics. Existing estimates of congestion costs rely on stated or revealed preferences studies. We explore a complementary measure of congestion costs based on self-reported happiness. Exploiting quasi-random variation in daily congestion in Beijing that arises because of superstitions about the number four, we estimate a strong effect of daily congestion on self-reported happiness. When benchmarking this effect against the relationship between income and self-reported happiness we compute implied congestion costs that are several times larger than conventional estimates. Several factors, including the value of reliability and externalities on non-travelers, can reconcile our alternative estimates with the existing literature.

[Ed.: A fun and clever new identification strategy.]

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