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Applying a Nonparametric Efficiency Analysis to Measure Conversion Efficiency in Great Britain

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  • Martin Binder

    ()
    (Max Planck Institute of Economics, Jena, Germany)

  • Tom Broekel

    (Department of Economic Geography, Faculty of Geosciences, Utrecht University, The Netherlands)

Abstract

In the literature on Sen’s capability approach, studies focussing on the empirical measurement of conversion factors are comparatively rare. We add to this field by adopting a measure of "conversion efficiency" that captures the efficiency with which individuals convert their resources into achieved functioning. We use a nonparametric efficiency procedure borrowed from production theory and construct such a measure for a set of basic functionings, using data from the wave 2006 of the British Household Panel Survey (BHPS). In Great Britain, 49.88% of the individuals can be considered efficient while the mean of the inefficient individuals reaches one fifth less functioning achievement. An individual's conversion efficiency is positively affected by getting older, being self-employed, married, having no health problems and living in the London area. On the other hand, being unemployed, separated/divorced/widowed and (self-assessed) disabled decrease an individual's conversion efficiency.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-100.

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Date of creation: 08 Dec 2009
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Handle: RePEc:jrp:jrpwrp:2009-100

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Keywords: conversion efficiency; welfare measurement; robust nonparametric efficiency analysis; functioning production;

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