How Much is Social Capital Worth?

26 Pages Posted: 4 Jun 2010 Last revised: 16 Apr 2022

See all articles by John F. Helliwell

John F. Helliwell

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Christopher Barrington-Leigh

McGill Institute for Health and Social Policy

Date Written: May 2010

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

Helliwell, John F. and Barrington-Leigh, Christopher, How Much is Social Capital Worth? (May 2010). NBER Working Paper No. w16025, Available at SSRN: https://ssrn.com/abstract=1612617

John F. Helliwell (Contact Author)

University of British Columbia (UBC) - Department of Economics ( email )

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Christopher Barrington-Leigh

McGill Institute for Health and Social Policy

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