In the course of the energy transition, the German Commission on “Growth, Structural Change and Employment” recommended a stepwise phase-out of coal-fired electricity generation until 2038 and a partly substitution by gas-fired power plants. In this context local externalities of various types of fossil fuel-fired power plants are investigated and quantified using the life satisfaction approach. Therefore, representative panel data on individual life satisfaction of 61,822 German residents from 1994 to 2016 is analyzed on postcode level with a fixed effects regression model. This work finds type-specific positive spillover effects of natural gas and lignite power plants in adjacent post code areas. External effects of hard coal-fired power plants cannot be evidenced. These results suggest future hedonic-pricing studies to consider spillover effects. Including interviewer fixed effects in the regression reveals the necessity to account for interviewer influences in life satisfaction studies with spatial reference, especially in cases of non-random assignment of interviewers.
Keywords: Life Satisfaction, Subjective Well-Being, Fossil Fuel Power Station, Externalities, Fixed Effects, SOEP