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

Journal of Human Development and Capabilities, 2011

Posted: 9 Mar 2008 Last revised: 20 Aug 2014

See all articles by Martin Binder

Martin Binder

University of the German Federal Armed Forces - Universität der Bundeswehr München; Bard College - The Levy Economics Institute

Tom Broekel

Utrecht University - Department of Economic Geography; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Date Written: August 25, 2009

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.

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

JEL Classification: I12, I31, R15

Suggested Citation

Binder, Martin and Broekel, Tom, Applying a Nonparametric Efficiency Analysis to Measure Conversion Efficiency in Great Britain (August 25, 2009). Journal of Human Development and Capabilities, 2011, Available at SSRN: https://ssrn.com/abstract=1104430

Martin Binder (Contact Author)

University of the German Federal Armed Forces - Universität der Bundeswehr München ( email )

Werner-Heisenberg-Weg 39
Neubiberg
Munich, 85579
Germany

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

Tom Broekel

Utrecht University - Department of Economic Geography ( email )

Heidelberglaan 2
Utrecht
Netherlands

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

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