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

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  • Powdthavee, Nattavudh

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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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 37 (2008)
Issue (Month): 4 (August)
Pages: 1459-1480

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Handle: RePEc:eee:soceco:v:37:y:2008:i:4:p:1459-1480

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Web page: http://www.elsevier.com/locate/inca/620175

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References

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Citations

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Cited by:
  1. Ennio Bilancini & Simone D'Alessandro, 2011. "Long-run Welfare under Externalities in Consumption, Leisure, and Production: A Case for Happy Degrowth vs. Unhappy Growth," Center for Economic Research (RECent), University of Modena and Reggio E., Dept. of Economics 072, University of Modena and Reggio E., Dept. of Economics.
  2. Latif, Ehsan, 2010. "Crisis, unemployment and psychological wellbeing in Canada," Journal of Policy Modeling, Elsevier, Elsevier, vol. 32(4), pages 520-530, July.
  3. Powdthavee, Nattavudh & van den Berg, Bernard, 2011. "Putting Different Price Tags on the Same Health Condition: Re-evaluating the Well-Being Valuation Approach," IZA Discussion Papers 5493, Institute for the Study of Labor (IZA).
  4. Brenda Gannon & Kieran Walsh, 2011. "Perceived Neighbourhood Context, Disability Onset and Old Age," Working Papers, Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds 1105, Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds.
  5. Damiano Fiorillo, 2010. "Volunteer work and domain satisfactions: Evidence from Italy," Discussion Papers 6_2010, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  6. Cortés Aguilar, Alexandra & Moro-Egido, Ana I. & Ateca Amestoy, Victoria María, 2011. "Social Interactions and Subjective Well-Being: Evidence from Latin America," DFAEII Working Papers 2011-05, University of the Basque Country - Department of Foundations of Economic Analysis II.
  7. Boyce, Christopher J. & Wood, Alex M., 2011. "Personality and the marginal utility of income: Personality interacts with increases in household income to determine life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 183-191, April.

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