The simplest and easiest way to have your citations utilize the Hanging Indent required by APA, is to use the function in MS Word that automatically formats your citation.
Step 1 - Type your citation. Here is an example:
Haybron, D. M. (2008). Philosophy and the science of subjective well-being. In M. Eid & R. J. Larsen (Eds.), The science of subjective well-being (pp. 17-43). New York, NY: Guilford Press.
Step 2 - Highlight the citation. Right click. Choose paragraph.
Step 3 - In the paragraph dialog box (see next image). Under Special, Choose Hanging. Set the line numbering to double.
Step 4 - You have a completed citation with double spacing and a hanging indent.
Tip # 1 - If you type all of your citations single-spaced with no formatting other than italics you can select (highlight) all of your references (an entire page) and format it as one paragraph.