SIA-1: Exploring the use of a subjective well-being approach to monetize non-market social goods in Hong Kong

By December 13, 2016

Exploring the use of a subjective well-being approach to monetize non-market social goods in Hong Kong

The use of Social Return On Investment (SROI) methods for measuring the effectiveness of social innovative policies has gained in popularity recently. However, identifying appropriate financial proxies for measuring the impact of interest is difficult especially if there is not enough reliable and relevant data. This issue is particularly challenging when the subject of interest is non-market goods.

Our research team conducted an exploratory analysis on the use of a novel valuation approach (often referred to as the subjective well-being approach) to monetize non-market social goods in the local context. We estimated the monetary value of the positive health impact associated with volunteering in Hong Kong SAR and five other locations (United States, Australia, Netherlands, Singapore, and Taiwan). Data used in this analysis was extracted from the latest wave of the World Value Survey. We estimated the “value” of the health benefits associated with volunteering in Hong Kong is approximately HK$11,300. This can be interpreted as the amount of extra annual household income that would be required to make a randomly chosen non-volunteers to have self-rated health status as if they were actively participating in volunteering in Hong Kong SAR. However, we must stress that our estimated value has a wide confidence level (95%CI: HK$ -1000 – HK$17,400) and our analysis is exploratory in nature, and our estimate only currently represents a “rough” but informed estimate.

Our work in addition shows there is likely a large by-country variability in the “value”. SROI practitioners in Hong Kong should be aware of the danger of directly applying estimates from other countries in the local context, as it may lead to incorrect valuation, and worse, misinform the public on the extent of the social impact created from a policy innovation. For development of social impact accounting in Hong Kong, there is an urgent need for more local research to establish “locally applicable” financial proxies for non-market goods, allowing better use of SROI accounting.

For details of our analysis, please see the report. Please contact Dr. C. H. Chan for enquiries.

Last update : December 13, 2016