How to use subjective well-being data for empirical analyses and valuations? A review of the economic literature

A growing economics literature uses subjective well-being measures for its analyses, which focus on diverse topics, such as public policies, amenities valuation, and the determinants of happiness. This survey reviews the literature on subjective well-being and economics, providing a guide for empirical economists on the foundations, methodological issues, and applications of the use of subjective well-being measures in economics. The survey has a special focus on their use of in the field of environmental economics. It presents the methodological framework of the Life Satisfaction Approach, and a systematic summary of the empirical works relating subjective well-being with environmental amenities.