Social Indicators Research

, Volume 103, Issue 3, pp 327–355 | Cite as

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

Article

Abstract

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.

Keywords

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

References

  1. Alkire, S. (2002). Valuing freedoms—Sen’s capability approach and poverty reduction. Oxford: Oxford University Press.Google Scholar
  2. Anand, P., & Hees, M. v. (2006). Capabilities and achievements: An empirical study. Journal of Socio-Economics, 35, 268–284.CrossRefGoogle Scholar
  3. Anand, P., Hunter, G., Carter, I., Dowding, K., Guala, F., & Hees, M. v. (2009). The development of capability indicators. Journal of Human Development and Capabilities, 10(1), 125–152.CrossRefGoogle Scholar
  4. Anand, P., Hunter, G., & Smith, R. (2005). Capabilities and well-being: Evidence based on the Sen-Nussbaum approach to welfare. Social Indicators Research, 74, 9–55.CrossRefGoogle Scholar
  5. Anand, P., Santos, C., & Smith, R. (2008). The measurement of capabilities. In: Basu, K., & Kanbur, R., (Eds.) Arguments for a better world: Essays in Honor of Amartya Sen (Vol. 1, Chap. 16 pp. 283–310). Oxford: Oxford University Press.Google Scholar
  6. Arrow, J. (1996). Estimating the influence of health as a risk factor on unemployment: A survival analysis of employment durations for workers surveyed in the German Socio-economic Panel (1984–1990). Social Science & Medicine, 42(12), 1651–1659.CrossRefGoogle Scholar
  7. Becchetti, L., Pelloni, A., & Rossetti, F. (2008). Relational goods, sociability, and happiness. Kyklos, 61(3), 343–363.CrossRefGoogle Scholar
  8. Becker, G. S. (1964). Human capital—A theoretical and empirical analysis, with special reference to education. New York/London: Columbia University Press.Google Scholar
  9. BHPS. (2009). British household panel survey. http://www.iser.essex.ac.uk/ulsc/bhps/.
  10. Binder, M., & Broekel, T. (2008). Applying a robust non-parametric efficiency analysis to measure conversion efficiency in Great Britain. SSRN working paper No. 1104430. Accepted for publication in: Journal of Human Development and Capabilities.Google Scholar
  11. Binder, M., & Coad, A. (2010). An examination of the dynamics of happiness using vector autoregressions. Journal of Economic Behavior & Organization, forthcoming, doi:10.1016/j.jebo.2010.06.006
  12. Brockmann, H., & Delhey, J. (2010). Introduction: The dynamics of happiness and the dynamics of happiness research. Social Indicators Research, 97, 1–5.CrossRefGoogle Scholar
  13. Burchardt, T. (2005). Are one man’s rags another man’s riches? Identifying adaptive expectations using panel data. Social Indicators Research, 74, 57–102.CrossRefGoogle Scholar
  14. Chiappero-Martinetti, E., & Salardi, P. (2007). Well-being process and conversion factors. An estimation of the micro-side of the well-being process. Mimeo.Google Scholar
  15. Clark, A. E., Frijters, P., & Shields, M. A. (2008a). Relative income, happiness, and utility: An explanation for the Easterlin paradox and other puzzles. Journal of Economic Literature, 46(1), 95–144.CrossRefGoogle Scholar
  16. Clark, A. E., Diener, E., Georgellis, Y., & Lucas, R. E. (2008b). Lags and leads in life satisfaction: A test of the baseline hypothesis. The Economic Journal, 118, F222–F243.CrossRefGoogle Scholar
  17. Clark, A. E., & Oswald, A. J. (2002). A simple statistical method for measuring how life events affect happiness. International Journal of Epidemiology, 31, 1139–1144.CrossRefGoogle Scholar
  18. Coad, A. (2010). Exploring the processes of firm growth: Evidence from a vector auto-regression. Industrial and Corporate Change, forthcoming, doi:10.1093/icc/dtq018.
  19. Cummins, R. A. (2000). Objective and subjective quality of life: An interactive model. Social Indicators Research, 52, 55–72.CrossRefGoogle Scholar
  20. Deutsch, J., Ramos, X., & Silber, J. (2003). Poverty and inequality of standard of living and quality of life in Great Britain. In M. J. Sirgy, D. Rahtz, & A. C. Samli (Eds.), Advances in quality-of-life theory and research (Chap. 7 pp. 99–128). Dordrecht: Kluwer Academic PublishersGoogle Scholar
  21. Diener, E., & Suh, E. (1997). Measuring quality of life: Economic, social, and subjective indicators. Social Indicators Research, 40, 189–216.CrossRefGoogle Scholar
  22. Diener, E., Suh, E., Lucas, R. E., & Smith, H. L. (1999). Subjective well-being: Three decades of progress. Psychological Bulletin 125(2), 276–302.CrossRefGoogle Scholar
  23. Dolan, P., & White, M. (2006). Dynamic well-being: Connecting indicators of what people anticipate with indicators of what they experience. Social Indicators Research, 75, 303–333.CrossRefGoogle Scholar
  24. Easterlin, R. A. (2003). Explaining happiness. Proceedings of the National Academy of Sciences, 100(19), 11176–11183.CrossRefGoogle Scholar
  25. Ferrer-i Carbonell, A., & Frijters, P. (2004). How important is methodology for the estimates of the determinants of happiness? The Economic Journal, 114, 641–659.CrossRefGoogle Scholar
  26. Frederick, S., & Loewenstein, G. F. (1999). Hedonic adaptation. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-Being: The foundations of hedonic psychology (pp. 302–329). New York: Russell Sage Foundation.Google Scholar
  27. Gardner, J., & Oswald, A. (2004). How is mortality affected by money, marriage, and stress? Journal of Health Economics, 23, 1181–1207.Google Scholar
  28. Gardner, J., & Oswald, A. J. (2007). Money and mental wellbeing: A longitudinal study of medium-sized lottery wins. Journal of Health Economics, 26, 49–60.CrossRefGoogle Scholar
  29. Graham, C., Eggers, A., & Sukhtankar, S. (2004). Does happiness pay? An exploration based on panel data from Russia. Journal of Economic Behavior & Organization, 55, 319–342.Google Scholar
  30. Grossman, M. (2005). Education and nonmarket outcomes. NBER working paper, no. 11582, http://www.nber.org/papers/w11582.
  31. Headey, B. (2010). The set point theory of well-being has serious flaws: On the eve of a scientific revolution? Social Indicators Research, 97, 7–21.CrossRefGoogle Scholar
  32. Johnston, D. W., Propper, C., & Shields, M. A. (2009). Comparing subjective and objective measures of health: Evidence from hypertension for the income/health gradient. Journal of Health Economics, 28, 540–552.CrossRefGoogle Scholar
  33. Kolenikov, S., & Angeles, G. (2009). Socioeconomic status measurement with discrete proxy variables: Is principal component analysis a reliable answer? Review of Income and Wealth, 55(1), 128–165.CrossRefGoogle Scholar
  34. Kuklys, W. (2005). Amartya Sen’s capability approach—theoretical insights and empirical applications. Berlin: SpringerGoogle Scholar
  35. Lancaster, K. (1966). A new approach to consumer theory. Journal of Political Economy, 74(2), 132–157.CrossRefGoogle Scholar
  36. Lelli, S. (2001). Factor analysis vs. fuzzy sets theory: Assessing the influence of different techniques on Sen’s functioning approach. Center for economic studies discussion paper series 01.21.Google Scholar
  37. Lelli, S. (2005). Using functionings to estimate equivalence scales. Review of Income and Wealth, 51(2), 255–284.CrossRefGoogle Scholar
  38. Levy, H., & Jenkins, S. P. (2008). Documentation for derived current and annual net household income variables, BHPS waves 1–16. Institute for Social and Economic Research, University of Essex, Colchester.Google Scholar
  39. Lykken, D., & Tellegen, A. (1996). Happiness is a stochastic phenomenon. Psychological Science, 7(3), 186–189.CrossRefGoogle Scholar
  40. Lyubomirsky, S., King, L., & Diener, E. (2005). The benefits of frequent positive affect: Does happiness lead to success? Psychological Bulletin, 131(6), 803–855.CrossRefGoogle Scholar
  41. McClements, L. D. (1977). Equivalence scales for children. Journal of Public Economics, 8(2), 191–210.CrossRefGoogle Scholar
  42. Myers, D. G. (1999). Close relationships and quality of life. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-Being: The foundations of hedonic psychology (pp. 374–391). New York: Russell Sage Foundation.Google Scholar
  43. Nussbaum, M. C. (2000). Women and human development. Cambridge: Cambridge University Press.Google Scholar
  44. Oswald, A. J. (1997). Happiness and economic performance. The Economic Journal, 107(445), 1815–1831.CrossRefGoogle Scholar
  45. Praag, B. S. v. (1991). Ordinal and cardinal utility: An integration of the two dimensions of the welfare concept. Journal of Econometrics, 50(1–2), 69–89.CrossRefGoogle Scholar
  46. Qizilbash, M. (2002). Development, common foes and shared values. Review of Political Economy, 14(4), 463–480.CrossRefGoogle Scholar
  47. Ramos, X. (2008). Using efficiency analysis to measure individual well-being with an illustration for Catalonia. In N. Kakwani & J. Silber (Eds.), Quantitative approaches to multidimensional poverty measurement (Chap. 9 pp. 155–175). Basingstoke: Palgrave MacmillanGoogle Scholar
  48. Ramos, X., & Silber, J. (2005). On the application of efficiency analysis to the study of the dimensions of human development. Review of Income and Wealth, 51(2), 285–309.CrossRefGoogle Scholar
  49. Robeyns, I. (2005). Selecting capabilities for quality of life measurement. Social Indicators Research, 74, 191–215.CrossRefGoogle Scholar
  50. Robeyns, I. (2006). Gender inequality in functionings and capabilities: Findings from the British household panel survey. In P. Bharati & M. Pal (Eds.), Gender disparity: Its manifestations, causes and implications (Chap. 13 pp. 236–277). Anmol, Delhi.Google Scholar
  51. Roche, J. M. (2008). Monitoring inequality among social groups: A methodology combining fuzzy set theory and principal component analysis. Journal of Human Development and Capabilities, 9(3), 427–452.CrossRefGoogle Scholar
  52. Sen, A. K. (1984). Rights and capabilities. In Resources, Values and Development (pp. 307–324). Cambridge/Mass: Harvard University Press.Google Scholar
  53. Sen, A. K. (1985a). Commodities and capabilities. Amsterdam: North Holland.Google Scholar
  54. Sen, A. K. (1985b). Well-being, agency and freedom: The Dewey lectures 1984. The Journal of Philosophy, 82(4), 169–221.CrossRefGoogle Scholar
  55. Sen, A. K. (1992). Inequality reexamined. Oxford: Clarendon Press.Google Scholar
  56. Shields, M. A., & Wheatley Price, S. (2005). Exploring the economic and social determinants of psychological well-being and perceived social support in England. Journal of the Royal Statistical Society. Series A (Statistics in Society), 168(3), 513–537.CrossRefGoogle Scholar
  57. Smith, J. P. (1999). Healthy bodies and thick wallets: The dual relation between health and economic status. Journal of Economic Perspectives, 13(2), 145–166.CrossRefGoogle Scholar
  58. Stevenson, B., & Wolfers, J. (2008). Economic growth and subjective well-being: Reassessing the Easterlin paradox. NBER working paper no. 14282.Google Scholar
  59. Taylor, M. F. E. (2009). British household panel survey user manual volume a: Introduction, technical report and appendices. In: J. Brice, N. Buck, & E. Prentice-Lane (Eds.), Colchester: University of Essex.Google Scholar
  60. UNDP. (2006). Human development report. http://hdr.undp.org/hdr2006/report.cfm.
  61. Zaidi, A., & Burchardt, T. (2005). Comparing incomes when needs differ: Equivalization for the extra costs of disability in the UK. Review of Income and Wealth, 51(1), 89–114.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  1. 1.Max Planck Institute of EconomicsEvolutionary Economics GroupJenaGermany

Personalised recommendations