Statistical Estimation of Causal Effects of Social Economy on Subjective Well-Being

Abstract

It is well known that measuring the noneconomic outcomes produced by social economy organizations is fairly difficult and complex. Usually, social economy organizations feature participatory and democratic decision-making processes that help create social capital and relational goods, and they are interested in social integration; accordingly, they tend to create an organizational culture that encourages their workers to contribute to local communities. Therefore, the hypothesis that the increased activities of social economy organizations have a causal effect on the subjective well-being of the people living near those organizations is highly plausible. In this paper, we estimate the causal effect and attempt to test the hypothesis statistically by using a dataset called the ‘‘Seoul Survey,’’ which provides observations on the subjective well-being of 45,496 citizens living in Seoul and the size of social economy organizations. Controlling for variables at the district level and the appropriate socioeconomic characteristics of each individual in the dataset, we find that the size of social organizations is highly significant.

Keywords: Social economy, Collective externalities effect, happiness