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

34 Pages Posted: 19 Jan 2012

See all articles by Ruud Muffels

Ruud Muffels

Tilburg University

Bruce Headey

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Date Written: June 1, 2011

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

Muffels, Ruud and Headey, Bruce, 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 (June 1, 2011). DIW Berlin Discussion Paper No. 385, Available at SSRN: https://ssrn.com/abstract=1988173 or http://dx.doi.org/10.2139/ssrn.1988173

Ruud Muffels (Contact Author)

Tilburg University ( email )

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HOME PAGE: http://www.uvt.nl/

Bruce Headey

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

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