Measuring the conditions of capability in Germany for the next few years

The capability approach postulated by Sen and hence wellbeing or the quality of life is not easily measured (Gaertner 1993). Within the research project soeb 3 (www.soeb.de, Sozioökonomische Berichterstattung / Socio-economic reporting) the concept of capability was adapted (Bartelheimer & Kädtler 2012) to better serve the needs of the research network. However, the operationalisation still remains a challenge. Using the idea of capabilities we wanted to construct an indicator that does not display the development of capabilities themselves but that focus on the changing conditions for them instead. The aim is to get an idea about the future possibilities for the capabilities to be realised and to assess the conditions for wellbeing to develop. Unfavourable changes or developments in the realisation opportunities could indicate the need for policy interventions and support the reduction of disparities. We constructed a composite indicator out of a set of different sub-indicators that provides the opportunity to assess the possibilities and conditions to realise capabilities and wellbeing given the economic background. In order to quantify the initial capability conditions and to show their development we combined macro and meso information with economic modelling. The data is provided by the Federal Statistical Office (System of National Accounts, Census and Household Budget Survey amongst others). The indicator consists of eight sub-indicators: labour market, GDP, income, demography, goods and services (consumption), government, regions (disparities) and environment. These sub-groups were selected considering the different aspects of influencing factors, the way demographic change translates into the economy, the practical set-up of established indicator systems and compliance with and embeddedness in the system of National Accounts. The outcome is evaluated and enriched with micro information. This link to the micro level is important because inequalities on the structural level may increase even though the macro-economic development points in a positive direction. The results so far show that the interpretation of the single sub-indicators are not necessarily clear-cut. Another issue is the technical setting of the weights of the single compositions of the sub-indicators. Nevertheless, it is possible to construct an indicator set that shows the development of realisation opportunities for well-being.