Social Assets

We present a model incorporating both social and economic components, and analyze their interaction. We argue that such analysis is necessary for an understanding of the social arrangements that are consistent with underlying economic fundamentals. We introduce the notion of a social asset, an attribute that has value only because of the social arrangements governing society. We consider a generational matching model in which an attribute has value in some equilibrium social arrangements (matching patterns), but not in others. We then show that productive attributes (such as education) can have their value increased above their inherent productive value by some social arrangements, leading to the notion of the social value of an asset.

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