As people are spending more time online, it is important to evaluate the impact of Internet use on individual well-being. Internet use yields direct utility and economic returns (e.g. better job, higher productivity) that may increase life sa-tisfaction. But the Internet might also have detrimental effects (addiction, social isolation, e.g.). This paper empirically examines the relation between Internet use and subjective well-being. Using Luxemburgish data from a European so-cial survey, we find evidence that non users are less satisfied in their life than Internet users. This result holds when we control for socio-demographic charac-teristics, social capital, values and beliefs, and health and income. Moreover, the positive influence of Internet use is stronger for low income and young in-dividuals. These findings suggest that public policy aiming to reduce the digital divide are socially desirable..
Keywords: Internet, happiness, well-being, digital divide, social capital, social values.
JEL classification codes: A12; D12; D6, H4, L86, Z13