Social Indicators Research

, Volume 103, Issue 3, pp 327-355

First online:

Disentangling the Circularity in Sen’s Capability Approach: An Analysis of the Co-Evolution of Functioning Achievement and Resources

  • Martin BinderAffiliated withMax Planck Institute of Economics, Evolutionary Economics Group Email author 
  • , Alex CoadAffiliated withMax Planck Institute of Economics, Evolutionary Economics Group

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There is an ambiguity in Amartya Sen’s capability approach as to what constitutes an individual’s resources, conversion factors and valuable functionings. What we here call the “circularity problem” points to the fact that all three concepts seem to be mutually endogenous and interdependent. To econometrically account for this entanglement we suggest a panel vector autoregression approach. We analyze the intertemporal interplay of the above factors over a time horizon of 15 years using the BHPS data set for Great Britain, measuring individual well-being in functionings space with a set of basic functionings, comprising “being happy”, “being healthy”, “being nourished”, “moving about freely”, “being well-sheltered” and “having satisfying social relations”. We find that there are indeed functionings that are resources for many other functionings (viz. “being happy”) while other functionings (“being well-sheltered” and “having satisfying social relations”) are by and large independent, thus shedding light on a facet of the capability approach that has been neglected so far.


Capability approach Vector autoregressions Functioning selection Co-evolution of functionings Circularity problem