Measuring welfare: Latent variable models for happiness and capabilities in the presence of unobservable heterogeneity

• 成果类型: Article
• 署名作者: Anand, Paul; Krishnakumar, Jaya; Ngoc Bich Tran
• 署名单位: University of Geneva; University of Oxford; Open University - UK; Universite de Toulouse; Universite Toulouse 1 Capitole; Toulouse School of Economics
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2010.11.007
• 发表日期: 2011
• 页码: 205-215
• 关键词: Capabilities; Freedoms; GLLAMM; happiness; instrumental variables; Multi-dimensionality; unobserved heterogeneity

摘要

The paper contributes to the operationalisation of the capabilities approach to welfare economics by developing and analyzing data on the freedoms of adults in Argentina. Specifically, it reports on the development and delivery of a survey instrument for measuring capabilities, calculates for each respondent a Nehring-Puppe type index of capabilities and examines the distribution of index scores. The main analytic part of the paper then goes on to develop a generalized linear latent and mixed model (GLLAMM) for assessing the impact of capabilities on life satisfaction, in which allowance is made for (i) unobserved heterogeneity and (ii) possible endogeneity, by introducing latent individual effects and by instrumenting capability variables using income and other socio-economic variables. Our empirical results show that empathy, self-worth, goal-autonomy, discrimination, safety and stress are statistically significant determinants of life satisfaction, in a decreasing order of importance. The paper concludes by suggesting that, if replicated, the findings have profound implications for the conceptualisation and evaluation of economic progress. (C) 2010 Elsevier By. All rights reserved.