Public participation is practiced widely in modern water management, but its effect on residents' subjective quality of life (QOL) or happiness has not been revealed. In this research, using the difference-in-difference (DID) model, the effect of participation in water management on residents' subjective QOL or happiness is empirically researched based on data from China. The results show that the positive effect of participatory water management on residents' happiness is quite significant and the extra effect of participation behavior on the participant's happiness is outstanding with the coefficients 0.073 and 0.036 respectively which pass the significance test. In addition, according to the regression coefficients of controlled variables, four demographic variables, namely the age, health, education and income, also produce significant effects on residents' happiness. It is concluded that both the result and procedure of participatory water management can really improve the participants' happiness. Extensive participation should be enhanced actively so as to increase residents' happiness.