Valuing non-market goods using subjective wellbeing data

Fujiwara, Daniel (2019) Valuing non-market goods using subjective wellbeing data. PhD thesis, London School of Economics and Political Science.

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Abstract

Attaching monetary values to non-market outcomes, goods and services has become a critical part of policy evaluation across OECD countries. The HM Treasury Green Book, the core policy evaluation guidance in the UK, requires that projects and policies be assessed using Cost-Benefit Analysis (CBA), which compares the benefits and costs of a policy in monetary terms and hence requires valuation of the outcomes of a policy. Outside of public policy, the private sector is also increasingly interested in valuing the outcomes of their activities to measure the social value that they generate. However, valuing non-market goods such as education, health, crime, environment, and heritage is difficult because they are not traded in markets. Wellbeing Valuation (WV) is a relatively new method, first developed in 2002. There are a number of technical problems with the method related to the statistical estimation methodology and a number of issues that have not been explored in full such as how to interpret the values. This has restricted the method’s use in policy evaluation to date. The aim of this thesis is to develop a comprehensive understanding of the WV approach and to improve the methodology so that it can be applied robustly in CBA, policy evaluation and in social value studies. I do this by developing a complete theory of WV and a new set of technical criteria to be used to assess the rigour of WV studies. I then develop a new statistical method for WV, the Three Step Wellbeing Valuation (3S-WV) method, and demonstrate how it solves for the main technical issues and improves the values and results derived from the method. I also provide a new framework for interpreting values derived from WV. I showcase the new 3S-WV method on a case study to value the non-pecuniary benefits of employment.

Item Type:	Thesis (PhD)
Additional Information:	© 2019 Daniel Fujiwara
Library of Congress subject classification:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HN Social history and conditions. Social problems. Social reform
Sets:	Departments > Social Policy
Supervisor:	Dolan, Paul
URI:	http://etheses.lse.ac.uk/id/eprint/4070

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