Putting a Price tag on Healthy Behavior: The Monetary Value of Sports Participation to Individuals

Abstract

This study estimates the monetary value of sports and physical activity applying the compensation variation method. While previous studies put a price tag on various health conditions, this study assigns a monetary value to healthy behavior, such as participation in sports and physical activity. Data from the German Socio-Economic Panel (1992–2013) are used for the analysis (n = 191,828). A generalized ordered response model is estimated to take the heterogeneity in the dependent variable, a single-item life satisfaction measure, into account. The results show that females (males) would be willing to forgo between €195 and €840 (€330 and €790) of their monthly net income in order to participate in sports and physical activity several times a year. A higher frequency of participation is associated with higher monetary values: females (males) are willing to forgo between €552 and €1281 (€491 and €1483) of their monthly net income to participate in sports or exercise at least once a month and between €577 and €1471 (€577 and €1662) to participate at least once a week, respectively, compared to not participating at all. Evidently, participation in sports and physical activity improves individuals’ life satisfaction and is of substantial value to individuals. The findings have implications for health economists, policy makers, and the courts. This study contributes to the literature examining the relationship between sports participation and well-being.