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Implementing the capability approach with respect for individual valuations: an illustration with Colombian data

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  • Koen Decancq
  • Erik Schokkaert
  • Blanca Zuluaga

Abstract

In many applications of the capability approach it is necessary to rank individuals with respect to their well-being. This raises the diââ¬âcult question of how to select the weights to be attached to the relevant functionings or capabilities. We explore the possibility of using individual valuations to set these weights and we propose the equivalent income measure as a specific well-being measure that is consistent with these individual valuations. We discuss its implementation and compare the results to four alternative well-being measures based on Colombian data for 2008: income, subjective well-being, the official SISBEN index, and the Colombian Multidimensional Poverty Index (CMPI). We find that there is remarkably little overlap between the different measures. The different well-being measures identify different individuals as worst-off. This finding highlights the empirical relevance of the selection of the well-being measure when implementing the capability approach.

Suggested Citation

  • Koen Decancq & Erik Schokkaert & Blanca Zuluaga, 2016. "Implementing the capability approach with respect for individual valuations: an illustration with Colombian data," Working Papers of Department of Economics, Leuven 543498, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    • Handle: RePEc:ete:ceswps:543498
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    1. Sabina Alkire & James Foster, 2011. "Understandings and misunderstandings of multidimensional poverty measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 289-314, June.
    2. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7), pages 476-487.
    3. Paul Anand & Cristina Santos & Ron Smith, 2007. "The measurement of capabilities," Open Discussion Papers in Economics 67, The Open University, Faculty of Social Sciences, Department of Economics.
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    1. Marko Ledic & Ivica Rubil, 2020. "Does going beyond income make a difference? Income vs. equivalent income in the EU over 2007-2011," Public Sector Economics, Institute of Public Finance, vol. 44(4), pages 423-462.
    2. Xavier Jara Tamayo, Holguer & Schokkaert, Erik, 2016. "Putting subjective well-being to use for ex-ante policy evaluation," EUROMOD Working Papers EM9/16, EUROMOD at the Institute for Social and Economic Research.
    3. Marko Ledić & Ivica Rubil, 2021. "Beyond Wage Gap, Towards Job Quality Gap: The Role of Inter-Group Differences in Wages, Non-Wage Job Dimensions, and Preferences," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(2), pages 523-561, June.
    4. H. Xavier Jara & Erik Schokkaert, 2017. "Putting measures of individual well-being to use for ex-ante policy evaluation," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(4), pages 421-440, December.

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