Going Beyond Functionings to Capabilities : an Econometric Model to Explain and Estimate Capabilities
AbstractAny attempt to operationalise the capability approach necessitates an adequate framework for the measurement of the abstract unobservable multidimensional concept that the term human development stands for. One such attempt is the latent variable approach including principal components, factor analysis and MIMIC models. The first two models provide estimates of the latent variables but are silent on the factors influencing these variables (capabilities in our context). MIMIC models represent a step further in this direction as they include exogenous “causal” variables for the latent factors but the effects go only in one direction i.e. from the “causes” to the latent variables. We argue that some of these causal factors not only influence human development but they are also influenced by it and that unless this feedback mechanism is taken into account we do not have a complete picture of this complex phenomenon. In this paper we present a theoretical framework incorporating the above aspects into a coherent system of causes, effects and interactions, leading to an econometric model which represents a generalisation of existing latent variable models. Estimating the model will enable us to explain the level of capabilities, say how they can be best improved, test our theoretical hypotheses and derive estimators that reflect the actual capabilities rather than just the functionings.
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Bibliographic InfoPaper provided by Département des Sciences Économiques, Université de Genève in its series Research Papers by the Department of Economics, University of Geneva with number 2004.12.
Length: 29 pages
Date of creation: Aug 2004
Date of revision:
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human development; capability approach; latent variables; qualitative response; simultaneous equations.;
Other versions of this item:
- Jaya Krishnakumar, 2007. "Going Beyond Functionings to Capabilities: An Econometric Model to Explain and Estimate Capabilities," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 8(1), pages 39-63.
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
This paper has been announced in the following NEP Reports:
- NEP-EDU-2004-11-07 (Education)
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