Ionospheric electron heating by resonant standing shear Alfv¿n waves in Earth's magnetosphere is investigated. It is demonstrated that in field line resonances (FLRs), electron heating by Alfv¿n waves produces ionization and large changes in the ionospheric Pedersen conductivity. This leads to a strong feedback effect on the FLR amplitude, along with narrow localization in latitude. Analysis and computer simulations performed with a 2D finite element MHD code, indicate that the primary mechanisms responsible for variations in the electron temperature are ohmic heating by the electron component of the Pedersen current, and electron cooling due to ionization losses and collisions with neutrals. It is shown that electron heating can be quantitatively more important than direct collisional ionization by precipitating electrons. The latter can reduce dissipation losses by at most a factor of two.