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Putting a price tag on friends, relatives, and neighbours: Using surveys of life satisfaction to value social relationships

Authors
Publisher
Elsevier Inc.
Publication Date
Volume
37
Issue
4
Identifiers
DOI: 10.1016/j.socec.2007.04.004
Keywords
  • Social Relationships
  • Friends
  • Neighbours
  • Social Capital
  • Life Satisfaction
  • Shadow Pricing
Disciplines
  • Economics
  • Psychology

Abstract

Abstract There is substantial evidence in the psychology and sociology literature that social relationships promote happiness for the individual. Yet the size of their impacts remains largely unknown. This paper explores the use of shadow pricing method to estimate the monetary values of the satisfaction with life gained by an increase in the frequency of interaction with friends, relatives, and neighbours. Using the British Household Panel Survey, I find that an increase in the level of social involvements is worth up to an extra £85,000 a year in terms of life satisfaction. Actual changes in income, on the other hand, buy very little happiness.

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