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Measuring the monetary value of social relations: A hedonic approach

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  • Colombo, Emilio
  • Stanca, Luca

Abstract

This paper presents an application of the hedonic approach to measure the monetary price of social relations. We use micro data for housing and labor markets in the 103 Italian province capitals to estimate the price of relational amenities and construct monetary indices of quality of relational life. We focus on time spent with friends, active participation in associations and frequency of going out for leisure activities as relational amenities, 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 € 1150 per year in terms of higher housing costs and foregone wages.

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  • Colombo, Emilio & Stanca, Luca, 2014. "Measuring the monetary value of social relations: A hedonic approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 50(C), pages 77-87.
    • Handle: RePEc:eee:soceco:v:50:y:2014:i:c:p:77-87
    DOI: 10.1016/j.socec.2014.03.001
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    2. Corsi, Alessandro & Frontuto, Vito & Novelli, Silvia, 2022. "Relational goods and direct purchase from farmers: estimating the value of the relationship between consumers and producers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(2), March.
    3. Luca Stanca & Ruut Veenhoven, 2015. "Consumption and happiness: an introduction," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(2), pages 91-99, June.
    4. Emilio Colombo & Valentina Rotondi & Luca Stanca, 2018. "Macroeconomic conditions and well-being: do social interactions matter?," Applied Economics, Taylor & Francis Journals, vol. 50(28), pages 3029-3038, June.
    5. Reinhard A. Weisser, 2019. "The price of mobility," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 39(1), pages 25-64, February.
    6. Cordera, Ruben & Coppola, Pierluigi & dell'Olio, Luigi & Ibeas, Ángel, 2019. "The impact of accessibility by public transport on real estate values: A comparison between the cities of Rome and Santander," Transportation Research Part A: Policy and Practice, Elsevier, vol. 125(C), pages 308-319.
    7. Rotondi, Valentina & Stanca, Luca & Tomasuolo, Miriam, 2017. "Connecting alone: Smartphone use, quality of social interactions and well-being," Journal of Economic Psychology, Elsevier, vol. 63(C), pages 17-26.
    8. Bucciol Alessandro & Cicognani Simona & Zarri Luca, 2020. "Social Status Perception and Individual Social Capital: Evidence from the US," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-14, January.
    9. Orlowski, Johannes & Wicker, Pamela, 2015. "The monetary value of social capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 26-36.

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    More about this item

    Keywords

    Social relations; Social capital; Hedonic prices; Quality of life; Well-being;
    All these keywords.

    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; Language; Social and Economic Stratification

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