Although they can drive you mad, there’s never been a better reason to make friends with your neighbours. This week, researchers announced that talking to the folk next door every day could be equivalent to earning an extra £40,000 a year.

In the first research of its kind, economists have put a value on social relationships, and factors as diverse as marriage, unemployment, health, friends, relatives, disability, divorce, separation and being widowed.

They found that regularly chatting to neighbours brings the same kind of life satisfaction as earning an extra £40,000 a year. It’s almost as valuable as a successful marriage, which is reckoned to be worth £50,000 a year, or an extra £1,000 a week. However, excellent health pips all of them, coming in at £300,000 a year.

“One of the things we wanted to find out was the answer to the age-old question: can money buy the greatest amount of happiness for us? Or do the sources of true and lasting satisfaction come from having deep inter-personal relationships with close friends and other people in the community?’’ says Dr Nattavudh Powdthavee, an economist at the University of London and one of the main researchers behind the study. And looking at the huge monetary values that the team calculated our relationships to be worth, much more than most of us earn in a year, then it seems that money really can’t buy happiness.

To calculate the cash value of our health and relationships, the team turned to the results of a national survey carried out annually by the Government on 10,000 people in Britain. It quizzes them about a wide variety of issues, including how they rate their happiness, their health, and relationships, as well as recording demographic data on employment, income, wealth and health.

By comparing data over several years, and monitoring any changes in the answers given on income and the other elements, the researchers were able to put a value on a wide range of diverse factors.

They created a life-satisfaction scale (ie, happiness points) that goes from one to seven, with one being utterly miserable and seven being euphoric. Results showed that, on average, people’s happiness points increased by 0.002 for each extra £1,000 they earned. From this the researchers were able to calculate a monetary value for happiness. Turning these figures around, the scientists reasoned that if somebody scored 0.002 more than somebody else on the life-satisfaction scale it was the same as them as earning an extra £1,000 (see box, facing page). Here are some of the results of the researchers’ calculations:

Meeting friends and relatives

Once or twice a month: worth £35,000 a year Once or twice a week: worth £50,500 a year Most days: worth £63,833 a year The results show that people who see their friends or relatives once or twice a month would need to have an additional income of £15,500 a year to have the same level of life satisfaction as those who see their friends and relatives once or twice a week.

The researchers say the results support the idea of having government policies that encourage social relationships within communities. They say that children who have good social networks and friends at school have better mental health than those who lack such networks because it boosts confidence and security.

Health

Good: worth an extra £251,000 a year Excellent: worth an extra £304,000 a year

The results show that a man or women whose health has declined from excellent to very poor would require a payment of £480,000 a year for the life-satisfaction score to remain unchanged. The cost of having a major disability is estimated at minus £165,000.

Getting together

Marriage: worth an extra £53,833 a year Living together: worth an extra £82,500 a year

A surprise finding was that moving in together was worth more than marriage. “In other studies, married people report higher life satisfaction on average than people who merely live together. We’re still not exactly clear why,’’ says Dr Powdthavee. The results also show that people who see less of their friends and relatives also appear to be more satisfied with their marriage. This suggests that social relationships outside the home may be a substitute for a poor relationships at home. One theory is that lack of friendship within the marriage forces people to look for it elsewhere

Break-ups

Separated: worth minus £57,667 a year Divorced: worth minus £24,500 a year Widowed: worth minus £200,000 a year

The separated had the lowest levels of life satisfaction, while there was little difference between single people and divorcees, probably because both groups tend to live alone. The researchers say the higher penalty for separation may be because divorced couples gain some happiness from the dissolution of their marriage.

Women who divorce are much more likely to develop heart disease in later life than those who stay married. New University of Texas research shows that divorced women were 60 per cent more likely to develop the disease than married women, and the negative effects persist even after any remarriage. But for men, marital loss has a negligible effect on the risk of heart disease.

Losing a spouse has one of the biggest effects on health and lifestyle. Research suggests that there is a particularly high risk of mental illness. Studies at the Netherlands Institute of Mental Health and Addiction, based on more than 7,000 men and women, shows that in the first year of bereavement, almost 22 per cent of the widowed had major depression diagnosed, almost 12 per cent had symptoms of posttraumatic stress disorder, and that there was a ninefold increase in the likelihood of developing an anxiety disorder.

How they worked out the value of happiness

The researchers found that an increase in income of £1,000 gave rise, on average, to an increase on the life-satisfaction scale of 0.002. So, therefore, an increase of 0.002 in happiness was worth £1,000 in extra income. The researchers used this to calculate the monetary value of various conditions and activities.

For example, the survey found that people who saw their friends most days scored, on average, 0.17 more happiness points than people who hardly ever saw their friends at all. The monetary value in thousands of pounds of extra income a year of visiting friends is, therefore, the happiness points difference (0.17) divided by the amount of happiness points difference that £1,000 could buy (0.002). So, as 0.17 divided by 0.002 equals 85, regularly seeing your friends is worth an extra £85,000 a year. Or, to put it another way, Billy-no-mates would have to earn an extra £85,000 a year to be as happy with life as someone who regularly saw their pals.

Times recommends

• Are eldest children really a cut above?
• Peaches Geldof: censored
• Top 10 style-setting films of all time