Biodiversity and happiness: Exploring the value of nature

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The value of a more diversified ecosystem lies beyond nature itself and extends to the human world. It provides benefits, both physically and psychologically, to each individual living in the system. Following this argument, we develop an empirical framework examining the impacts of biodiversity on human well-being in China. Using bird diversity index as a proxy for biodiversity at the city-level, we find a significant positive relationship between biodiversity and self-reported happiness, even after accounting for individual and regional factors. In addition, we employ the establishment of new natural reserves as a quasi-natural experiment to construct a difference-indifferences(DID) model to demonstrate that improvements in biodiversity can indeed lead to higher levels of happiness. These findings underscore the value of nature in enhancing human well-being and highlight the need for policies to support biodiversity.