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Going Beyond Functionings to Capabilities : an Econometric Model to Explain and Estimate Capabilities

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  • Jaya Krishnakumar

Abstract

Any 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.

Suggested Citation

  • Jaya Krishnakumar, 2004. "Going Beyond Functionings to Capabilities : an Econometric Model to Explain and Estimate Capabilities," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 2004.12, Institut d'Economie et Econométrie, Université de Genève.
  • Handle: RePEc:gen:geneem:2004.12
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    References listed on IDEAS

    as
    1. Muthen, Bengt, 1983. "Latent variable structural equation modeling with categorical data," Journal of Econometrics, Elsevier, vol. 22(1-2), pages 43-65.
    2. Lars Osberg & Andrew Sharpe, 2003. "Human Well-being and Economic Well-being: What Values Are Implicit in Current Indices?," CSLS Research Reports 2003-04, Centre for the Study of Living Standards.
    3. Basudeb Biswas & Frank Caliendo, 2002. "A Multivariate Analysis of the Human Development Index," Working Papers 2002-11, Utah State University, Department of Economics.
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    Citations

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    Cited by:

    1. Sabina Alkire, 2011. "Multidimensional Poverty and its Discontents," OPHI Working Papers ophiwp046, Queen Elizabeth House, University of Oxford.
    2. Koen Decancq and Maria Ana Lugo, "undated". "Setting Weights in Multidimensional Indices of Well-Being," OPHI Working Papers ophiwp018, Queen Elizabeth House, University of Oxford.
    3. Yele Batana, 2008. "Multidimensional Measurement of Poverty in Sub-Saharan Africa," OPHI Working Papers ophiwp013, Queen Elizabeth House, University of Oxford.
    4. Ross, Kara L. & Zereyesus, Yacob & Shanoyan, Aleksan & Amanor-Boadu, Vincent, 2015. "The Health Effects of Women Empowerment: Recent Evidence from Northern Ghana," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 18(1).
    5. Patricia López Rodríguez & Isidro Soloaga & Rodolfo de la Torre García, 2012. "Capital social y políticas públicas: análisis del efecto del programa de coinversión social sobre las organizaciones de la sociedad civil," Serie documentos de trabajo del Centro de Estudios Económicos 2012-02, El Colegio de México, Centro de Estudios Económicos.
    6. Tindara Addabbo & Maria Laura Di Tommaso & Anna Maccagnan, 2014. "Gender Differences in Italian Children's Capabilities," Feminist Economics, Taylor & Francis Journals, vol. 20(2), pages 90-121, April.
    7. Paul Ningaye & Yemedjeu Tiomela & Virginie Takoutio Feudjio, 2011. "Multi-Poverty in Cameroon: a Dimensional Scores Approach. Multi-pauvreté au Cameroun: Approche par les scores dimensionnels," Working Papers PMMA 2011-01, PEP-PMMA.
    8. Jaya Krishnakumar & Florian Chávez-Juárez, 2016. "Estimating Capabilities with Structural Equation Models: How Well are We Doing in a ‘Real’ World?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(2), pages 717-737, November.
    9. Ramzi Mabsout, 2011. "Capability and Health Functioning in Ethiopian Households," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 101(3), pages 359-389, May.
    10. Tellez, Juan & Krishnakumar, Jaya & Bungener, Martine & Le Galès, Catherine, 2016. "Capability deprivation of people with Alzheimer's disease: An empirical analysis using a national survey," Social Science & Medicine, Elsevier, vol. 151(C), pages 56-68.
    11. Krishnakumar, Jaya & Ballon, Paola, 2008. "Estimating Basic Capabilities: A Structural Equation Model Applied to Bolivia," World Development, Elsevier, vol. 36(6), pages 992-1010, June.
    12. Tindara Addabbo & Maria Laura Di Tommaso & Anna Maccagnan, 2016. "Education Capability: A Focus on Gender and Science," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(2), pages 793-812, September.
    13. repec:eee:joecag:v:6:y:2015:i:c:p:68-78 is not listed on IDEAS
    14. Nicolas Gravel, 2010. "Nanak Kakwani and Jacques Silber (eds): Quantitative approaches to multidimensionnal poverty measurement," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 35(2), pages 337-343, July.
    15. Jaya Krishnakumar & A. Nagar, 2008. "On Exact Statistical Properties of Multidimensional Indices Based on Principal Components, Factor Analysis, MIMIC and Structural Equation Models," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 86(3), pages 481-496, May.
    16. Francesco Burchi & Chiara Gnesi, 2016. "A Review of the Literature on Well-Being in Italy: A Human Development Perspective," Forum for Social Economics, Taylor & Francis Journals, vol. 45(2-3), pages 170-192, August.
    17. Anand, Paul & Krishnakumar, Jaya & Tran, Ngoc Bich, 2011. "Measuring welfare: Latent variable models for happiness and capabilities in the presence of unobservable heterogeneity," Journal of Public Economics, Elsevier, vol. 95(3), pages 205-215.
    18. Paul Ningaye & Tiomela Alexi & Takoutio Virginie, 2013. "Multi-Poverty in Cameroon: A Structural Equation Modeling Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 113(1), pages 159-181, August.
    19. repec:spr:soinre:v:135:y:2018:i:2:d:10.1007_s11205-016-1502-3 is not listed on IDEAS
    20. Tomáš Želinský, 2010. "Analýza chudoby na Slovensku založená na koncepte relatívnej deprivácie
      [Analysis of Poverty in Slovakia Based on the Concept of Relative Deprivation]
      ," Politická ekonomie, University of Economics, Prague, vol. 2010(4), pages 542-565.
    21. Sebastian Silva-Leander, 2011. "On the Possibility of Measuring Freedom: A Kantian Perspective," OPHI Working Papers ophiwp049, Queen Elizabeth House, University of Oxford.
    22. Paula Rodríguez-Modroño & Lina Gálvez-Muñoz & Mauricio Matus-López & Mónica Domínguez-Serrano, 2013. "A gender analysis of children’s well-being and capabilities through time use data," Department of Economics (DEMB) 0009, University of Modena and Reggio Emilia, Department of Economics "Marco Biagi".
    23. repec:mod:depeco:0009 is not listed on IDEAS
    24. Hasan, Hamid, 2013. "Capabilities vis-a-vis Happiness: Evidence from Pakistan," MPRA Paper 44892, University Library of Munich, Germany.
    25. Ling Zhou & Huazhen Lin & Yi-Chen Lin, 2016. "Education, Intelligence, and Well-Being: Evidence from a Semiparametric Latent Variable Transformation Model for Multiple Outcomes of Mixed Types," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(3), pages 1011-1033, February.

    More about this item

    Keywords

    human development; capability approach; latent variables; qualitative response; simultaneous equations.;

    JEL classification:

    • 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, Innovation, Technological Change, and Growth - - Economic Development - - - General

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