Abstract
BACKGROUND: While economics is growing in Indonesia, its Happiness Index remains steady. Regarding the average concentration of dissolved particles, Indonesia is ranked sixth globally. Many factors can affect happiness. Environmental conditions, especially air quality, are considered to influence individual happiness. Therefore, this research investigates the impact of air quality and health on happiness. METHODS: Data used in this study is the microdata of Indonesia's Happiness Survey (SPTK) in 2021. With more than 70,000 respondents, the study uses Ordered Probit as an analysis method with subjective happiness as the dependent variable. The independent variables used in this study are air quality, age, gender, housing area per capita, marital status, and health status. All independent variables except age are categorical. The variable of interest, air quality, is coded "1" if the IKU achieves the Strategic Plan's target of 84.2 and "0" otherwise. IKU is a regional air quality index that combines two substances. RESULTS: At a significance level of 5%, there is a positive relationship between subjective happiness and air quality. In other words, if air quality (IKU) meets the Strategic Plan target (≥ 84.2), then a person is more likely to have a higher level of happiness. It can be explained more with the marginal effect. The marginal effect concludes that if the target is achieved, the probability of having a lower level of happiness decreases by up to 2.8%, and a very high level of happiness rises by 5.1%. Regarding health status, the rarer someone gets sick, the happier she/he is. CONCLUSION: The study finds that air pollution could lower happiness, while better health increases happiness. Therefore, it is important to meet the target of IKU and to improve public health. Some good practices can be adopted to achieve this goal.