What is the ASVB?

The Australian Social Value Bank currently contains 63 different social values related to all aspects of Australian life. They have been derived from Australian data-sets, using a cutting-edge approach called Wellbeing Valuation.

The main advantage of Wellbeing Valuation is that it is a cost-effective valuation approach with a high level of rigour.  By using a consistent valuation approach for all of the social values in our bank, means that while you may be examining values of different types of outcomes, you are still comparing like with like. This means that for the first time you can compare the social value of your training program against the social value created by your mental health program.

Wellbeing Valuation is used to calculate the primary benefits to individuals, such as improved self-esteem or stopping smoking, and these values can be used within any SROI or Cost-Benefit type analysis or within the ASVB Value Calculator.

The ASVB also measures secondary benefits to others, which includes impacts like cost savings to government via reduced Centrelink payments or increased tax revenue.

The methodologies used within the ASVB, Wellbeing Valuation and Cost Benefit Analysis, are considered best-practice and are globally endorsed across the OECD.

Social impact measurement is concerned with assessing whether an intervention or action is in society’s best interests. Any intervention or action that is in society’s best interests creates social value.

In order for an organisation to create social value we need to understand how an intervention or action impacts on the quality of life of people in society. Quality of life (QoL) refers to people’s overall levels of wellbeing. People’s wellbeing is affected by many things covering economic circumstances, the environment and social issues such as education, health, employment and crime. We, therefore, need to account for the impact of all of these outcomes on people’s wellbeing to understand social value.

Measuring social value has a number of key stages.

First, we need to understand what outcomes are important for people’s wellbeing and then measure them. Here we need to measure more than just the association or correlation between an outcome and the intervention or program; we need to measure the causal impact of the intervention or program on the outcomes of interest.

Second, we then need to have a well-defined account of wellbeing. This is an ethical or moral issue. There are a few contenders here and for the purposes of the Australian Social Value Bank we look at how outcomes impact on people’s self-reported wellbeing, measured by their reported levels of life satisfaction. Life satisfaction is a key measure of wellbeing and social progress endorsed and used by the Organisation for Economic Cooperation and Development (the OECD) and many OECD Governments such as the UK Government.

And finally, we need a way of comparing the benefits of the intervention/program to the costs. In order to do this the internationally endorsed method is to value benefits in monetary terms so that they can be compared directly to the financial costs of running an intervention/program using Cost-Benefit Analysis (CBA). Whilst many approaches for measuring social impact exist, CBA is the most rigorous and this is why it is endorsed by OECD governments and international organisations.

To understand the value of outcomes to society we need to measure the impact of these outcomes on people’s wellbeing and then estimate the amount of money that would create the same impact on wellbeing (OECD, 2013, 2017).

Wellbeing valuation (WV) is a method for valuing primary benefits recognised by the Organisation for Economic Cooperation and Development (OECD) and UK policy appraisal and evaluation guidance tools to measure social impact. It  has also been used by various other OECD governments and has been featured in over 100 key high-profile academic publications in journals and books. It involves measuring the value of intangible (non-market) outcomes by using data on peoples’ wellbeing.

With the increase in popularity and interest in wellbeing in psychology, a large number of surveys across the world now include a number of self-reported wellbeing questions, known as subjective wellbeing (SWB). These questions ask people directly about how they feel and can take many different forms. Typical questions include asking people; “All things considered, how happy are you?” or “How satisfied are you with life?” and respondents rate their answers on numeric scales (usually 1-7 or 0-10). This SWB data is then matched to the conditions in the respondent’s life in order to assess how different things impact on their wellbeing.

The WV approach estimates the impact of the service or outcome and the impact of income on people’s SWB and uses these estimates to calculate the exact amount of money that would produce the equivalent impact on SWB as the service or outcome in question. The approach ensures that other factors which could also be driving changes in SWB are controlled for, such as age, socioeconomic status, gender and marital status as guided by Fujiwara and Campbell, 2011. The key SWB measure used in the WV approach (and indeed the main measure used in academic research and national surveys) is life satisfaction.

As an example, say we are interested in the value that volunteering brings to peoples’ lives. Statistical analysis can be used to estimate the impact that volunteering once per week has on life satisfaction and let’s say that we find that volunteering leads to a 10% increase in people’s life satisfaction because of the enjoyment and sense of purpose they get out of it. We then want to know the exact amount of money that would induce the same 10% positive impact on life satisfaction and this can also be estimated using the same types of statistical methods.

Let’s assume that the analysis finds that AUD$1,800 per year in extra income would also induce a 10% change in life satisfaction. Then we can conclude that the value of volunteering to the individual is on average AUD$1,800 per year for the sample we looked at. This is an exact measure of monetary value that aligns with economic theory and best-practice policy evaluation guidelines.

Primary benefits directly accrue to individuals in terms of improvements in their quality of life and wellbeing. Primary benefits measure the experience an individual has in aspects of their life that can’t be directly bought or sold, such as feeling confident or being safe in their community. These values can be estimated by analysing answers in large social attitude surveys such as the Household, Income and Labour Dynamics in Australia (HILDA) data set.

Such surveys ask people detailed questions about their life circumstances and their subjective wellbeing (SWB). Analysis of this data reveals the average dollar amount needed to increase someone’s wellbeing by as much as the change in their life, such as becoming confident. This provides a monetary value of becoming confident without trying to commodify or commercialise the outcome itself. This method is known as the Wellbeing Valuation approach.

Changes in individual circumstances can also lead to a change in income. As well as this wellbeing impact, the primary benefits therefore also include any increases in income associated with changes in life circumstances. So, in the example of employment, the primary benefit values cover the extra income the individual earns once they are employed as well as the increases in their confidence, self-esteem, health and social relationships due to employment.

For more information on how the primary benefits are calculated, please see the section on Wellbeing Valuation .

Secondary benefits are the impact of changes in peoples’ lives on government finances and resources that have a cash value.

For instance, a local charity program which helps people to find employment, will also benefit the government through reduced Centrelink payments and increased tax revenue. These benefits are additional to primary benefits and must be accounted for separately in social impact analysis.

The Secondary benefits have been calculated based on existing Australian research and then linked to population characteristics identified in HILDA. For instance, the secondary benefit associated with quitting smoking will consider the health costs of smoking in Australia provided by research papers or government publications and relate it to the number of smokers identified in the HILDA data to calculate a secondary benefit per person who quits smoking.

The ASVB then adds the primary and secondary benefit values together for each attained outcome to understand the overall social value.

The ASVB includes a list of 68 social values, differentiated by region and age groups across Australia, in Australian dollars, related to all manner of areas including:

•  Physical and Mental health
• Housing situation
• Employment
• Education
• Sport and exercise
• Crime
•  Drugs and alcohol
• Support for victims of physical or sexual violence