AbstractMost studies of life quality are concentrated on a country-level scale, while local differences within a country or area are less studied. Thus, the effect of the environment on life quality on a local scale remains understudied and is often represented by one generalized common factor. In this study, we investigated the effect of an objectively measured environmental quality variable and subjective reflections of this (perceptions of environmental quality) in relation to life quality in a coastal community. Hence, we tested the effect of objective and subjective water quality measures using a model, accounting for other traditional variables (e.g., income and health) that predict life quality variations. Our findings indicate that perceptions of the environment are strongly associated with life quality, whereas objectively measured environmental quality is associated with life quality to a lesser extent. Thus, our results suggest that the impact of the environment on life quality is mediated via the way the environment is perceived (psychological effects) and less by the actual conditions of the environment.