Petrol Prices and Subjective Well-Being: Longitudinal Data Evidence From China

Abstract

This paper studies the effects of petrol prices on individuals’ subjective well-being (SWB). Three waves of household data from the China Health and Retirement Longitudinal Study and petrol prices at the province level are used and ordered probit models are applied. The empirical results show that petrol prices are negatively associated with SWB due to income effects. The findings are robust to alternative independent variable measures and clustered standard errors.