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How Much is Social Capital Worth?

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  • John F. Helliwell
  • Christopher P. Barrington-Leigh

Abstract

This paper uses data from global and Canadian surveys data to estimate the powerful linkages between social connections, their related social identities, and subjective well-being. Our explanatory variables include several measures of the extent and frequency of use of social networks, combined with a number of measures of general and domain-specific trust, which are often used to gauge effective social capital. Using these measures we find that trust and social network size and use are all strong predictors of subjective well-being. We demonstrate the size and impact of these effects by calculating compensating differentials, measured as the changes in household income that would produce equivalent levels of life satisfaction. We introduce three key measures of social identity - the respondents' sense of belonging to their communities, province and country - and find that they add significantly to the explanation of life satisfaction among Canadian respondents, and provide important mediating channels whereby social capital is linked to subjective well-being.

Suggested Citation

  • John F. Helliwell & Christopher P. Barrington-Leigh, 2010. "How Much is Social Capital Worth?," NBER Working Papers 16025, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16025
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    References listed on IDEAS

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    1. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    2. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    3. John F. Helliwell & Shun Wang, 2010. "Trust and Well-being," NBER Working Papers 15911, National Bureau of Economic Research, Inc.
    4. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.
    5. Christopher P. Barrington-Leigh & John F. Helliwell, 2008. "Empathy and Emulation: Life Satisfaction and the Urban Geography of Comparison Groups," NBER Working Papers 14593, National Bureau of Economic Research, Inc.
    6. John F. Helliwell, 2008. "Life Satisfaction and Quality of Development," NBER Working Papers 14507, National Bureau of Economic Research, Inc.
    7. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    8. John Helliwell, 2007. "Well-Being and Social Capital: Does Suicide Pose a Puzzle?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(3), pages 455-496, May.
    9. John F. Helliwell & Haifang Huang, 2010. "How's the Job? Well-Being and Social Capital in the Workplace," ILR Review, Cornell University, ILR School, vol. 63(2), pages 205-227, January.
    10. John F. Helliwell & Christopher P. Barrington-Leigh, 2010. "Measuring and Understanding Subjective Well-Being," NBER Working Papers 15887, National Bureau of Economic Research, Inc.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Dave Roberts on Great Spaces and Political Freedom
      by Mike in Rortybomb on 2011-05-27 00:08:11

    Citations

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    Cited by:

    1. Kamal Kasmaoui, 2020. "What makes Moroccans happy: A micro-data study," Working Papers hal-02956855, HAL.
    2. Graafland, J.J. & Compen, B., 2012. "Economic Freedom and Life Satisfaction : A Cross Country Analysis," Other publications TiSEM b80a9d8e-af55-43fc-bad2-9, Tilburg University, School of Economics and Management.
    3. Barrington-Leigh, C.P., 2024. "The econometrics of happiness: Are we underestimating the returns to education and income?," Journal of Public Economics, Elsevier, vol. 230(C).
    4. Andrés Rodríguez-Pose & Viola Berlepsch, 2014. "Social Capital and Individual Happiness in Europe," Journal of Happiness Studies, Springer, vol. 15(2), pages 357-386, April.
    5. Johan Graafland, 2023. "On Rule of Law, Civic Virtues, Trust, and Happiness," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(4), pages 1799-1824, August.
    6. Cameron, James E. & Voth, Jennifer & Jaglal, Susan B. & Guilcher, Sara J.T. & Hawker, Gillian & Salbach, Nancy M., 2018. "“In this together”: Social identification predicts health outcomes (via self-efficacy) in a chronic disease self-management program," Social Science & Medicine, Elsevier, vol. 208(C), pages 172-179.
    7. Tri Wahyu Nugroho & Nuhfil Hanani & Hery Toiba & Sujarwo Sujarwo, 2022. "Promoting Subjective Well-Being among Rural and Urban Residents in Indonesia: Does Social Capital Matter?," Sustainability, MDPI, vol. 14(4), pages 1-16, February.
    8. Efstratia Arampatzi & Martijn J. Burger & Natallia Novik, 2018. "Social Network Sites, Individual Social Capital and Happiness," Journal of Happiness Studies, Springer, vol. 19(1), pages 99-122, January.
    9. Mariska Horst & Hilde Coffé, 2012. "How Friendship Network Characteristics Influence Subjective Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 107(3), pages 509-529, July.
    10. Atilano Pena-López & Paolo Rungo & Beatriz López-Bermúdez, 2021. "The "Efficiency" Effect of Conceptual Referents on the Generation of Happiness: A Cross-National Analysis," Journal of Happiness Studies, Springer, vol. 22(6), pages 2457-2483, August.
    11. Owsiński, Jan W. & Pielak, Aneta M. & Sęp, Krzysztof, 2013. "Smartness, culture and local authority ICT awareness: an empirical enquiry for a province in Poland," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 115(2), pages 1-8, June.
    12. Lam, Ben C.P. & Haslam, Catherine & Haslam, S. Alexander & Steffens, Niklas K. & Cruwys, Tegan & Jetten, Jolanda & Yang, Jie, 2018. "Multiple social groups support adjustment to retirement across cultures," Social Science & Medicine, Elsevier, vol. 208(C), pages 200-208.
    13. John F. Helliwell, 2014. "Understanding and improving the social context of well-being," Chapters, in: Timo J. Hämäläinen & Juliet Michaelson (ed.), Well-Being and Beyond, chapter 5, pages 125-143, Edward Elgar Publishing.
    14. Elyakim Kislev, 2020. "Social Capital, Happiness, and the Unmarried: a Multilevel Analysis of 32 European Countries," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 15(5), pages 1475-1492, November.
    15. Christopher Barrington-Leigh, 2016. "Sustainability and Well-Being: A Happy Synergy," Development, Palgrave Macmillan;Society for International Deveopment, vol. 59(3), pages 292-298, December.
    16. Takashi Oshio, 2017. "Which is More Relevant for Perceived Happiness, Individual-Level or Area-Level Social Capital? A Multilevel Mediation Analysis," Journal of Happiness Studies, Springer, vol. 18(3), pages 765-783, June.

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    More about this item

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative

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