ABSTRACT
This chapter reviews some basic economic lessons of exchange to understand the role of Socio-emotional goods (SEGs) in the exchange of economically valued goods (EVGs) and Attachment Value Goods (AVGs). It explains that SEGs are included in most interpersonal exchanges, either directly or indirectly. The chapter provides several examples of what we have called the Social Capital Exchange Theorem namely that incorporating social capital and SEGs into an exchange increases the likelihood and level of exchange, and alters the terms of trade. One detailed study of how social capital alters the level and terms of trade focused on the exchange of farmland. Farmland exchange is just one of many interesting valuation and exchange problems. Social capital is also likely to have significant effects in many other market exchanges and valuation problems, especially when the buyer and seller are known to each other and the sale involves interpersonal interactions.
