HACT (Housing Associations Charitable Trust) have worked in partnership with housing providers including Magenta Living to develop a tool for measuring social value in housing.
Market values for outcomes such as volunteering or increased confidence do not exist because they cannot be bought or sold. However, it’s useful to be able to measure these things so we can make assessments and judgements on the success of our projects.
The latest thinking to judge the success of a project or policy is to assess how it affects people’s wellbeing. This is a ‘welfarist’ approach to evaluation and is increasingly dominating thinking on impact measurement in governments, international organisations and the charity and not-for-profit sectors.
Rather than asking people about how much something has improved their life, which introduces psychological complexities and extensive primary data collection, wellbeing valuation analyses existing vast datasets of national surveys which instead reveal effects on wellbeing. These surveys ask an individual to rate their life satisfaction or wellbeing and then ask hundreds of other questions about their life.
Analysis can isolate the impact of any specific aspect of life on wellbeing. We can then value this by finding from the data the equivalent amount of money needed to increase someone’s wellbeing by the same amount.
For example, if we estimate that living in a safe area on average increases an individual's life satisfaction by 3%. We then need to find the equivalent amount of money that also increases life satisfaction by 3%. If this were, say, £2,000 per year, then that can be said to be the value of living in a safe area.
Wellbeing valuation is the latest thinking in social impact measurement and is the most robust approach available. Wellbeing valuation offers the opportunity to re-focus on what matters yet does not require specialist knowledge or skills and is cost-effective as the datasets are already available. It also enables Magenta Living to respond in light of the Social Value (Public Services) Act 2012.
A wellbeing value can be derived for any aspect or life circumstance asked about within the surveys, making the application of the approach hugely broad and versatile, with a reach far beyond housing.
The wellbeing valuation approach follows HM Treasury Green Book guidelines, the UK Government's core guide to evaluation used by all central government departments, local authorities and public sector bodies.
HACT have developed their housing model with Daniel Fujiwara, a Senior Econometrician at the London School of Economics (LSE) who is leading the development of the approach for government. Together they have created the UK Value Repository (UKVR) using the wellbeing valuation approach. The UKVR is a comprehensive set of wellbeing values relevant to housing provider community activities e.g. moving into employment, increased financial confidence. This enables us to calculate the figures which we have used throughout this document.