ECONOMY ECONOMICS

Social Economics
REVIEWED BY SANDRA LIM | Updated Jun 25, 2019

What Is Social Economics?

Social economics is a branch of economics that focuses on the relationship between social
behavior and economics. It examines how social norms, ethics, emerging popular sentiments,
and other social philosophies influence consumer behavior and shape public buying trends. It
uses history, current events, politics, and other social sciences to predict potential results from
changes to society or the economy.

Social economic theories may differ from conventional beliefs about economics. Traditional
schools of thought often assume that actors are self-interested and make rational decisions.
Social economic theories often consider subject matter outside the focus of mainstream
economics, including the effect of the environment and ecology on consumption and wealth.

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Social Economics Explained

Social economics also referred to as socioeconomics, is concerned with the relationship
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between social and economic factors within society. These factors influence how a particular
group or socioeconomic class behave within society, including their actions as consumers.
Diff t i i l h diff t i iti di h th di t th i
Different socioeconomic classes may have different priorities regarding how they direct their
funds.
Certain goods or services may be considered unavailable to specific classes based on their own
perceived ability to afford them and their income. These goods or services can include access to
more advanced or complete medical care, educational opportunities, and the ability to buy
food that meets specific nutritional guidelines.

KEY TAKEAWAYS
Social economics focuses on the relationship between social behavior and economics.
The societal influences on consumer behavior and shapes public buying trends is a
focus of social economics.
An individual’s socioeconomic status shapes their beliefs and attitudes.
Individuals from more affluent social classes will likely have more opportunity to
achieve higher education, as is expected by peers and other members of their class.
An individual existing at the poverty level may hold the irrational belief that higher
education is unattainable, and the individual's socioeconomic group may reinforce this
belief.

Socioeconomic Class
A socioeconomic classis a group of people with similar characteristics. These characteristics can
include social and economic standing, level of education, current profession, and ethnic
background or heritage.
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Impact of Socioeconomic Status
According to the American Psychological Association (APA), an individual’s socioeconomic
status can significantly impact their beliefs and attitudes, such as perceptions of
available opportunities and beliefs in life directions. For example, an individual from an affluent
social class will likely have a greater opportunity to achieve higher education and may be
expected to pursue such a goal by peers and other members of their class. Completing higher
education is more likely to increase your income potential, as well as provide opportunities
to interact with people of similar or more advanced social standing and build beneficial social
networks.

In contrast, an individual existing at or below the poverty level may hold an irrational belief that
higher education is unattainable, a conviction that may also be reinforced by the individual's
peers within the same socioeconomic group. This belief can result in fewer and less
rewarding employment opportunities and, effectively, restrict that person's growth
potential within society.

Real World Example

Studies conducted by the Institute of Education Sciences, National Center for Education
Statistics found that children from low-income families generally do not have the same
opportunities available to them as children from middle or high-income families. For example,
low-income families may not be able to pay for their children's participation in team sports,
music lessons, or private tutoring, which can propel them toward achieving a prosperous future
as well as provide them with growing confidence to take on more challenges. Also, these
children may attend overcrowded schools where education is underfunded, understaffed, or
considered inferior; thus, seeing no way to take the path to a better future, they likely accept
their economic condition as permanent. Similar to their family and peers, many will not even
consider a post-high school education and be unlikely to break through the poverty level as Ad
adults.
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Finance is a term for matters regarding the management, creation, and study of money, investments, and
other financial instruments. more

Thorstein Veblen Defintion

Thorstein Veblen was an economist and sociologist who lived from 1857 to 1929 and is best known for
coining the term "conspicuous consumption." more

Conflict Theory Definition

The conflict theory states that society is in a constant state of conflict due to competition for limited
resources. more

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