The first article listed some techniques to determine social value. In my department, EPP Benefit-cost analysis and decision analysis are used rather often although what metrics you incorporate is really important. Also, I'd advise using probabilistic assumptions rather than deterministic ones in computing social value (remember our lecture about uncertainty).
Again, there is social value is pretty vague and we need to utilize all of the tools available to us to make an educated decision. Although I am not working on a non-profit, we need to execute rigorous mental exercise to understand our vision and our shareholders'/investors' vision. What do we value? What do they value? What should we/they value? I think vision is the defining factor in social value.
As a side note I would like to underscore a metric that can be very useful in social value calculation, Value of Statistical Life (VSL), namely. A lot of social initiatives can be translated into increase in life expectancy. Knowing the number of life years added per person we can convert this into a monetary value via VSL. There are multiple ways of calculating VSL, one of them is surveying people. Check out these two articles for a clearer definition:
Hua Wang and Jie He, "The value of statistical life: A contingent investigation in China," Policy Research Working Paper 5421, The World Bank, 35pp., 2010. (8)
OECD, "Valuing lives saved from environmental, transport and health policies: A metaanalysis of stated preference studies, ENV/EPOC/WPNEP(2008)10/FINAL 60pp.,2010. (8)
To put things in context, Westerners tend to value their lives at $10 million/year whereas in the developing world we see VSL on the order of $10 thousand /person/year.
This can give a sense of how our social value could be converted into monetary terms.
No comments:
Post a Comment