Economic assessments are an essential part of society's decision-making and prioritization processes. In the areas of traffic, environment and climate, both socio-economic and budgetary analyses of how new initiatives affect citizens are already included. Investments in social welfare are often based solely on budgetary values and overlook the social benefits the investment creates. The total value of social investments may be underestimated, and the potential for measuring well-being expressed through life satisfaction and valuing social change is significant. A common approach is needed to include social value creation in decision-making and prioritization processes.
Limitations: Note that a distinction is made between capitalization and monetization. OSVB does not put a value on the capitalizable budgetary changes, as these values are already in existing calculation models, e.g. the SØM model.
Budgetary economic value1 - Capitalization
Budgetary economic value is the direct cost savings or increased revenue. It is usually authorities that achieve these, e.g. when a person moves from cash benefits to employment. Values for these are accessed via the National Board of Social Services' SØM, own calculations and other available information.
Social value2 - Monetization
Social value is a theoretical valuation of the life improvement a person gains from a social change. Social value is thus not a directly capitalizable savings for the municipality, society or the individual. Social value is, for example, increased self-esteem, well-being or reduced loneliness.
Socio-economic value ensures a consistent basis for a systematic assessment of an investment's advantages and disadvantages for society in monetary terms. A socio-economic analysis can include average values in the following areas:
Social value ( subjective wellbeing valuation): Subjective Wellbeing Valuation (1) : Frijters & Krekel (2021): A Handbook for Wellbeing Policy-Making: History, Theory, Measurement, Implementation, and Examples
Danish Ministry of Finance (2017): Guidance on socio-economic impact assessments