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Going Beyond Functionings to Capabilities: An Econometric Model to Explain and Estimate Capabilities

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  • Jaya Krishnakumar

Abstract

Any attempt to operationalize the capability approach necessitates an adequate framework for the measurement of the abstract unobservable multidimensional concept that the term 'capability' stands for. One such attempt is the latent variable approach, which considers the different dimensions of capability or human development as unobserved variables (factors) manifesting themselves through measurable indicators. In this paper, we propose a structural equation econometric model that accounts for the interdependence among the latent dimensions and other observed endogenous factors and includes causal exogenous variables affecting the latent dimensions and their indicators. We estimate the model using data on a cross-section of countries across the world and use our empirical model to derive capability indicators in different dimensions.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Human Development and Capabilities.

Volume (Year): 8 (2007)
Issue (Month): 1 ()
Pages: 39-63

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Handle: RePEc:taf:jhudca:v:8:y:2007:i:1:p:39-63

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Related research

Keywords: Human development; Capability approach; Latent variables; Item response; Simultaneous equations;

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References

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  1. Basudeb Biswas & Frank Caliendo, 2002. "A Multivariate Analysis of the Human Development Index," Working Papers 2002-11, Utah State University, Department of Economics.
  2. Lars Osberg & Andrew Sharpe, 2003. "Human Well-being and Economic Well-being: What Values Are Implicit in Current Indices?," CSLS Research Reports 2003-04, Centre for the Study of Living Standards.
  3. Muthen, Bengt, 1983. "Latent variable structural equation modeling with categorical data," Journal of Econometrics, Elsevier, vol. 22(1-2), pages 43-65.
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Citations

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Cited by:
  1. Ramzi Mabsout, 2011. "Capability and Health Functioning in Ethiopian Households," Social Indicators Research, Springer, vol. 101(3), pages 359-389, May.
  2. Sabina Alkire, 2011. "Multidimensional Poverty and its Discontents," OPHI Working Papers ophiwp046, Queen Elizabeth House, University of Oxford.
  3. Nicolas Gravel, 2010. "Nanak Kakwani and Jacques Silber (eds): Quantitative approaches to multidimensionnal poverty measurement," Social Choice and Welfare, Springer, vol. 35(2), pages 337-343, July.
  4. Addabbo Tindara & Di Tommao Maria Laura & Maccagnan Anna, 2011. "Gender differences in Italian children’s capabilities," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201108, University of Turin.
  5. Tomáš Želinský, 2010. "Analysis of Poverty in Slovakia Based on the Concept of Relative Deprivation," Politická ekonomie, University of Economics, Prague, vol. 2010(4), pages 542-565.
  6. repec:mod:depeco:0009 is not listed on IDEAS
  7. Patricia López Rodríguez & Isidro Soloaga & Rodolfo de la Torre García, 2012. "Capital social y políticas públicas: análisis del efecto del programa de coinversión social sobre las organizaciones de la sociedad civil," Serie documentos de trabajo del Centro de Estudios Económicos 2012-02, El Colegio de México, Centro de Estudios Económicos.
  8. Anand, Paul & Krishnakumar, Jaya & Tran, Ngoc Bich, 2011. "Measuring welfare: Latent variable models for happiness and capabilities in the presence of unobservable heterogeneity," Journal of Public Economics, Elsevier, vol. 95(3), pages 205-215.
  9. Paul Ningaye & Yemedjeu Tiomela & Virginie Takoutio Feudjio, 2011. "Multi-Poverty in Cameroon: a Dimensional Scores Approach. Multi-pauvreté au Cameroun: Approche par les scores dimensionnels," Working Papers PMMA 2011-01, PEP-PMMA.
  10. Krishnakumar, Jaya & Ballon, Paola, 2008. "Estimating Basic Capabilities: A Structural Equation Model Applied to Bolivia," World Development, Elsevier, vol. 36(6), pages 992-1010, June.
  11. Francesco Burchi & Chiara Gnesi, 2013. "A review of the literature on well-being in Italy: A human development perspective," Departmental Working Papers of Economics - University 'Roma Tre' 0175, Department of Economics - University Roma Tre.
  12. Paul Ningaye & Tiomela Alexi & Takoutio Virginie, 2013. "Multi-Poverty in Cameroon: A Structural Equation Modeling Approach," Social Indicators Research, Springer, vol. 113(1), pages 159-181, August.
  13. Jaya Krishnakumar & A. Nagar, 2008. "On Exact Statistical Properties of Multidimensional Indices Based on Principal Components, Factor Analysis, MIMIC and Structural Equation Models," Social Indicators Research, Springer, vol. 86(3), pages 481-496, May.

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