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Capabilities and Choices: Do They Make Sen'se for Understanding Objective and Subjective Well-Being? An Empirical Test of Sen's Capability Framework on German and British Panel Data

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  • Ruud Muffels
  • Bruce Headey

Abstract

In Sen's Capability Approach (CA) well-being can be defined as the freedom of choice to achieve the things in life which one has reason to value most for his or her personal life. Capabilities are in Sen's vocabulary therefore the real freedoms people have or the opportunities available to them. In this paper we examine the impact of capabilities alongside choices on subjective and objective well-being. There is a lot of theoretical work on Sen's capability framework but still a lack of empirical research in measuring and testing his capability model especially in a dynamic perspective. The aim of the paper is to elaborate and test a "stock-flow" model measuring capabilities and choices to explain longer-term changes in well-being using 25 years of German and 18 years of British data. Three measures of well-being are constructed: life satisfaction for subjective well-being (SWB) and relative income and employment security for objective well-being (OWB). We ran random and fixed effects GLS models. The findings strongly support Sen's capabilities framework and provide new evidence on the way capabilities and choices matter for well-being. Capabilities indicated by human capital, trust, altruism and risk taking, and family, work-leisure, lifestyle and social choices show to strongly affect the three well-being indicators but their effect sizes differ largely dependent on the type of indicator used.

Suggested Citation

  • Ruud Muffels & Bruce Headey, 2011. "Capabilities and Choices: Do They Make Sen'se for Understanding Objective and Subjective Well-Being? An Empirical Test of Sen's Capability Framework on German and British Panel Data," SOEPpapers on Multidisciplinary Panel Data Research 385, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp385
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    1. The happiness agenda makes for miserable policy
      by Daniel Sage, Doctoral Researcher in Social Policy at University of Stirling in The Conversation on 2014-01-09 12:22:30

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    1. repec:spr:soinre:v:135:y:2018:i:2:d:10.1007_s11205-016-1497-9 is not listed on IDEAS
    2. Ana I. Moro Egido & Maria Navarro & Ángeles Sánchez-Domínguez, 2017. "Changes in Subjective Well-Being Over Time in Germnay," ThE Papers 17/05, Department of Economic Theory and Economic History of the University of Granada..
    3. Suwastika Naidu, 2016. "Does Human Development Influence Women’s Labour Force Participation Rate? Evidences from the Fiji Islands," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1067-1084, July.
    4. Mary Breheny & Christine Stephens & Fiona Alpass & Brendan Stevenson & Kristie Carter & Polly Yeung, 2013. "Development and Validation of a Measure of Living Standards for Older People," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 1035-1048, December.
    5. Claudia Kettner & Angela Köppl & Sigrid Stagl, 2014. "Towards an operational measurement of socio-ecological performance," WWWforEurope Working Papers series 52, WWWforEurope.
    6. Graham, Carol & Nikolova, Milena, 2015. "Bentham or Aristotle in the Development Process? An Empirical Investigation of Capabilities and Subjective Well-Being," World Development, Elsevier, vol. 68(C), pages 163-179.
    7. Silvia Maja Melzer & Ruud J. Muffels, 2012. "Migrant's Pursuit of Happiness: The Impact of Adaption, Social Comparison and Relative Deprivation; Evidence from a 'Natural' Experiment," SOEPpapers on Multidisciplinary Panel Data Research 448, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Peter Krause, 2015. "Quality of Life and Inequality," SOEPpapers on Multidisciplinary Panel Data Research 765, DIW Berlin, The German Socio-Economic Panel (SOEP).
    9. repec:spr:jhappi:v:18:y:2017:i:4:d:10.1007_s10902-016-9768-3 is not listed on IDEAS

    More about this item

    Keywords

    Subjective and objective well-being; happiness; work-leisure choices; income security; employment security; Sen¿s capability approach; German and British panel data; fixed effects GLS models;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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