Measuring the Monetary Value of Social Relations: a Hedonic Approach
AbstractThis paper presents an application of the hedonic approach to measure the monetary price of social relations. We use individual-level data for housing and labor markets in 103 Italian cities to estimate the price of relational amenities and construct monetary indexes of quality of relational life. We focus on time spent with friends, active participation in associations and frequency of going out for leisure activities, while controlling for standard amenities such as weather, environment, services, and socio-demographic characteristics. We find that individuals are willing to pay a positive and significant monetary price to live in cities where people spend more time with their friends. A one standard deviation increase in the share of those who meet their friends most frequently is worth an extra \euro 1,150 per year in terms of higher housing costs and foregone wages.
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Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 256.
Date of creation: Oct 2013
Date of revision: Oct 2013
social relations; social capital; hedonic prices; quality of life; well-being;
Find related papers by JEL classification:
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
- D6 - Microeconomics - - Welfare Economics
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-HAP-2013-10-18 (Economics of Happiness)
- NEP-LTV-2013-10-18 (Unemployment, Inequality & Poverty)
- NEP-SOC-2013-10-18 (Social Norms & Social Capital)
- NEP-URE-2013-10-18 (Urban & Real Estate Economics)
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