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Measuring Standard of Living in the UK - An Application of Sen's Functioning Approach Using Structural Equation Models

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  • Wiebke Kuklys

Abstract

This paper contributes to the multidimensional welfare measurement literature inspired by Sen's functioning approach. After reviewing the different statistical techniques used in multidimensional welfare measurement, we suggest structural equation modelling as an appropriate alternative to measure and model the achievement of welfare. Functionings are conceptualised as latent variables which can only be measured with error. We assess what determines the achievement of these functionings, and compare the numerical functionings values with income in a simple poverty analysis.

Suggested Citation

  • Wiebke Kuklys, 2004. "Measuring Standard of Living in the UK - An Application of Sen's Functioning Approach Using Structural Equation Models," Papers on Strategic Interaction 2004-11, Max Planck Institute of Economics, Strategic Interaction Group.
  • Handle: RePEc:esi:discus:2004-11
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    References listed on IDEAS

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    Cited by:

    1. Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2009. "How do institutions affect corruption and the shadow economy?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 773-796, December.
    2. Nicolas Fayard & Chabane Mazri & Alexis Tsouki`as, 2021. "Is the Capability approach a useful tool for decision aiding in public policy making?," Papers 2101.09357, arXiv.org.
    3. Sebastian Silva-Leander, 2011. "On the Possibility of Measuring Freedom: A Kantian Perspective," OPHI Working Papers 49, Queen Elizabeth House, University of Oxford.
    4. Axel Dreher & Christos Kotsogiannis & Steve McCorriston, 2011. "The Impact of Institutions on the Shadow Economy and Corruption: A Latent Variables Approach," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 13, Edward Elgar Publishing.

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    More about this item

    Keywords

    Welfare measure; capability approach; structural equation modelling; poverty analysis;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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