The way to consider this sort of economy is like a barter economy. It works for small traders and individual producers, as long as and only if, everyone is producing something that everyone else needs.
Consider a simple case. I produce eggs and cheese, you produce eggs and really want some cheese. It's the same with favours and gratitude, it breaks down when there's something I can do for you, but nothing you can do for me. This is a major problem.
The way to break out of this would be if everyone contributed to a central pool of kindnesses. I do something for the old lady up the road, that means I have credit in the pool. The old lady up the road has a lifetime of credit in the pool and as such all the neighbours help her even if they weren't born when she gained that credit. In turn when I need something the community's willingness to help is based on how much I have done for other people as a whole rather than what I have done for each individual member of the group.
This works as long as you're within or not much exceeding the monkeysphere limits. In too large a group it breaks down again, but within limits it should help to build a very strong community.
The key though, is not to quantify, but rather to qualify. Bill Gates doesn't consider himself to be one of the great philanthropists because he hasn't given from his own quality of life the way so many do, he's only given time and money, but his own lifestyle remains unaffected. It's the relative quality of what someone gives to a community that matters. The community values the quality of what someone gives over mere value, good teachers and nurses are like gold dust compared to businessmen and traders in ordinary goods.
The great flaw in this system is that people will play games with it. There will be those who only do big obvious things that people see and receive great praise for very little done. There will be those who work quietly away in the background unseen by most. The important factor here is to be seen to do, rather than actually to do. The community sees and gossips and knows, but group knowledge is also easily gamed by those who choose to do so and malicious rumor can destroy an innocent far more easily than in a financial system. How is something valued? As much by how many people see you do it as how big a thing it was you did. And as for those who quietly work hard in the background? Well as everyone knows, the reward for being good at digging is a bigger shovel.