science

Mental capital

Mental capital is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Mental capital rather than just read about it. In short: Mental capital means the degree of mastery of life skills at the time an individual faces the choices of life. This term is first introduced by the economist Lok Sang Ho in his book Principles of Public Policy Practice, (Kluwer Academic Publishers, 2001).

Key takeaways

Mental capital belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Mental capital to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Mental capital from memory before moving on to harder problems.

Reference excerpt

Mental capital means the degree of mastery of life skills at the time an individual faces the choices of life. This term is first introduced by the economist Lok Sang Ho in his book Principles of Public Policy Practice, (Kluwer Academic Publishers, 2001).

Summary "Mental capital is related to the concept of psychological capital... In the psychology literature, psychological capital is usually taken to comprise hope, self-efficacy, optimism, and resiliency. These four cornerstones of psychological capital are all attitudinal. Mental capital is not only positive attitudes but also includes certain key skills that allow one to produce such mental goods as self-esteem and sense of achievement, as well as self-reflective skills."(Ho, 2012, p. 44) Mental capital is also related to the concept of immaterial economic capital, as used in the German Historical tradition of economics ('Geistiges Kapital'). It refers to both individual, social and collective capacities, as well as both actual and historically accumulated immaterial capital. Early German economists who used this concept were e.g. Adam Müller and Friedrich List. Mental capital is related to habit formation. When habit is formed, to the extent that it serves the interest of the individual over the long term, it is mental capital. To the extent that a habit hurts the interest of the individual over the long term, it is negative mental capital. Negative mental capital will take a long time to be transformed because habits are notoriously difficult to break.

Related publication Since then, much work has been done by psychologists. In 2008, two significant studies on the subject were published, one by the UK Department for Innovation, Business, and Skills through the British Government Office for Science, entitled Mental Capital and Well Being, the other by a doctorate student at the Universitaire Pers Maastricht. The UK Report defines mental capital as encompassing "a person’s cognitive and emotional resources. It includes their cognitive ability, how flexible and efficient they are at learning, and their 'emotional intelligence', such as their social skills and resilience in the face of stress. It refers to emotional capital (Gendron, 2004, 2011, 2014) and the set of 'emotional competence'. It therefore conditions how well an individual is able to contribute effectively to society, and also to experience a high personal quality of life." Lok Sang Ho sees mental capital as an input into the production of such "mental goods" as sense of security, self-esteem, inner peace, confidence, sense of autonomy, etc. Production of mental goods, like the production of physical "end goods" that enter a person's utility function, is seen to be part of household activity that may include market goods and the time of the person as an input. The latter theory of household production owes to the work of economics Nobel Laureate Gary Becker, particularly his 1965 Economic Journal article. An updated discussion of positive and negative mental capital is now available in Ho's Economics and Psychology of Happiness: the LIFE framework and sustainable development, published by Routledge 2026.

Notes

References

Gendron B. (2004). Why Emotional Capital Matters in Education and in Labour? Toward an Optimal Use of Human Capital and Knowledge Management, In Les Cahiers de la Maison des Sciences Economiques. http://econpapers.repec.org/paper/msewpsorb/r04113.htm

Worked examples

Example 1 — a first encounter with Mental capital

Start with the simplest possible case. Write down what Mental capital claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Mental capital before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Mental capital ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Mental capital

In research: Mental capital appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Mental capital in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Mental capital is common in secondary-school and first-year university syllabi. It links to neighbouring topics Positive psychology, so understanding it makes those chapters shorter.
In everyday life: Look for Mental capital outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Mental capital in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Mental capital means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Mental capital out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Mental capital in simple terms?

Why does Mental capital matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Mental capital?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Mental capital.