What is 'Social Economics'
Social economics is a branch of economics that focuses on the relationship between social behavior and economics, and it examines how social norms, ethics and other social philosophies that influence consumer behavior shape an economy, and uses history, politics and other social sciences to examine potential results from changes to society or the economy.
Social economic theories do not move in lockstep with those of orthodox schools of economics, which often make the assumption that actors are self-interested and can rationally make decisions. It often takes into account subject matter outside of what mainstream economics focuses on, including the effect of the environment and ecology on consumption and wealth.
BREAKING DOWN 'Social Economics'
Social economics, also referred to as socioeconomics, involves the relationship between social and economic factors within a society. These are factors that influence how a particular group, or socioeconomic class, act within society including their actions as consumers. Different socioeconomic classes may have varying priorities regarding how they direct their funds.
There may also be certain goods or services that are considered unavailable to certain classes based on their ability to afford them. This can include access to more advanced or complete medical care, educational opportunities, and the ability to meet certain nutritional guidelines.
A socioeconomic class is defined as a group of people with similar characteristics. These characteristics can include social and economic standing, as well as other factors such as level of education, current profession, ethnic background or heritage, and most other ways individuals can be categorized.
Impact of Socioeconomic Status
An individual’s socioeconomic status generally shapes the beliefs and attitudes a person holds. This can include ideas regarding what opportunities are or are not available, as well as beliefs regarding the direction his life should go.
An example can be seen regarding the varying education levels within differing socioeconomic classes. A person considered to be in a more affluent class will likely have more opportunity to achieve a higher education and may be expected to pursue such goals by other members of his class. Should the pursuit of an education lead to higher-paying job opportunities, he will likely interact with the society accordingly.
In contrast, a person considered to be in poverty may hold the false belief that higher education is not attainable by any means, and this belief may also be reinforced by his peer group. This can result in lesser employment opportunities and, effectively, restricts how that person function within society.