Does it matter where it comes from? Urban air pollution and life satisfaction

This paper investigates whether the source of urban air pollution matters for subjective well-being, using self-reported life satisfaction data from urban Chile. While most studies examine the effects of total pollution, this study distinguishes between pollution generated by households, firms, and transport. I develop a conceptual framework to model household avoidance behaviour and responses to differently targeted policy changes, and empirically test the relationship between source-specific pollution exposure and life satisfaction using spatially matched survey and emissions data. The results show that air pollution from firms and transport is negatively associated with life satisfaction, while pollution generated by households, primarily through wood-burning stoves and heating, does not have a significant overall effect. An analysis of geographic heterogeneity of the results, introduced using climatic macro-zones, shows that in southern Chile, where biomass use is prevalent, residential pollution is linked to lower life satisfaction among non-emitting households. These findings suggest that disaggregating pollution by source provides more actionable insights for policy and highlights the importance of targeting pollution in ways that reflect its origins and distributional impacts.