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Abstract
The transition from a centrally planned socialist economy to free markets brought unprecedented economic growth to Mongolia, but also severe environmental problems associated with rapid urban development. Its capital city Ulaanbaatar (UB) has experienced extreme air pollution during the Winter months for almost two decades. While the impacts of local air pollution on cardiovascular and respiratory health are well documented, this is the first study to evaluate the relationship between individuals’ subjective well-being and particulate matter concentrations. By combining newly available survey data on subjective well-being in UB and particulate matter readings from monitoring stations and weather data, I found significant relationship between air pollution and life satisfaction in UB. The estimated coefficients imply a sizeable residents’ willingness-to-pay for better air quality, in the order of $191 annually for a 10 μg/m3 (or a 5.6%) reduction in daily average concentrations.