The Social Capital and Health Hypothesis: A Theory and New Empirics Featuring the Norwegian HUNT Data

We develop and explore an economic model in which cigarette consumption enhances utility but reduces the probability of survival through the period. Social capital is produced by time spent developing and maintaining social relationships. By requiring time inputs, social capital has an opportunity cost, represented by the wage. Elements exogenous to the subject’s decision making, such as the introduction of city parks, new social clubs, or the influence of local social norms enhance the productivity of time spent in social activity so as to produce utility. This framework is cast deliberately in a compact model so as to reveal fundamental relationships and permit clear comparative static analysis. These are tested in a Norwegian longitudinal data set new to this field of study.