Beyond GNP and Current HDI:
An Overview of The Capabilities
Measurement Project
Oxford University Workshop on Measurement of
Freedom May 2008
Open University and University of Pavia
Workshop on Capabilities and Health, Pavia 2008
Paul Anand
Economics, The Open University and
HERC, Oxford University
AHRB Funded Work
Key collaborators:
 Ian Carter, Universita di Pavia
 Keith Dowding, London School of Economics
 Francesco Guala, Exeter University
 Martin van Hees, Groningen Universiteit
 Graham Hunter, The Open University
with help from Maria Sigala (Oxford), Ingrid
Robeyns (Leiden), Ron Smith (Birkbeck) and
Cristina Santos (UCL/Open) and Amartya Sen!
Some publications
Economica
Health Economics
Journal of Health Economics
Social Science and Medicine
Social Indicators Research
Journal of Medical Ethics
Journal of Human Development (forthcoming)
Chapter in Festschrift for Amartya Sen Arguments
for a Better World, OUP, Basu and Kanbur,
(forthcoming)
Motivation



Problems with Expected Utility Theory
Challenges to National Income
Measurement (work in UK and OECD)
Operationalising capabilities approach in
high income countries
Limits to Gross National
Product per capita




Ignores defensive expenditures
Ignores value of household work
Ignores differences in needs
Emphasises material affluence (eg ignores qol at work, rights violations)
Measures monetary value of production or cost of consumption but
measurement of human welfare could be improved
GDP
Satellite Accounts, Social Accounting Matrices (non-monetary indicators as
complements)
HDI
More dimensions, breakdowns
Limits to Gross National
Product
Capabilities Measurement
Project (Summary to Date)


Phase I (2000-2006)
primary and secondary data
devise methodology for capability assessment
conduct national UK survey using OCAP
explore some econometric issues associated with use of capability
data
Phase II (2006extending applications of capabilities measurement (OCAP family)
short form version (Glasgow)
Spanish translation (Buenos Aires)
further applications (e.g. mental health in Oxford, housing in
social policy) analysis
Some Early Work

Human Development Index

Schokkaert and van Ootegem (1990)
Enrica Chiappero Martinetti (1994, 2000)
Laderchi (1997)
Kuklys (2005)

Brandolini and D’Alessio (1999)



“The purpose is to assess the operational content of the approach ie the
empirical methods to measure functionings and capabilities…much of what
one can do depends the available data….we discussed the practical
difficulties of moving to capabilities and proposed to remain in the (refined)
functionings space.”
Source: Plenary paper given to the International Economics Association
Congress, Buenos Aires
Theory (Sen 1985 pp11-4)
ui = hi(.)
ui is ‘happiness enjoyed’
hi (fi(c(xi)))
xi is vector of commodities
possessed by i
c(.) converts commodity vector
into vector of characteristics
fi(.) reflects one pattern of use 
Fi
“Qi represents the freedom a
person has in terms of the
choice of functionings, given
his personal features Fi…and
his command over
commodities Xi.”
Theory (Sen 1985 pp11-4)
ui = hi(.)
ui is ‘happiness enjoyed’
hi (fi(c(xi)))
xi is vector of commodities possessed by i
c(.) converts commodity vector into vector of characteristics
fi(.) reflects one pattern of use  Fi
“Qi represents the freedom a person has in terms of the choice
of functionings, given his personal features Fi…and his
command over commodities Xi.”
Our approach
1. Elicit indicators of Qi, Ci,j where j = 1…60+
2. Estimate lsi = hs(Ci,j)
where s in hs is null or allows only partial heterogeneity
A. Anand and van Hees (2006)
Question Types
Achievements and Scope
Perceived distribution of scope
Domains
Happiness
Success
Health
Intellectual Stimulation
Social Relations
Environments
Personal Integrity
Overall Options
Models
Overall Options Satisfaction
Individual Achievements
Questions
Generally, my life is happy (strongly agree...)
b. I feel the scope to seek happiness in my life is
(very good…)
c. The proportion of the population who have severely limited opportunities
to seek happiness is (0-9%,…)
a.
a. I have satisfying social relations (strongly agree…)
b. I feel the scope to form satisfying social relations in my life is (very
good…)
c. The proportion of the population who have severely limited opportunities
to form satisfying social relations is (0-9%)
a. I live a health life for my age (strongly agree…)
b. I feel the scope to live a healthy life for my age is (very good…)
c. The proportion of the population who have severely limited opportunities
to live healthy lives for their age is (0-9%)
Some Conclusions
Each achievement is a function of its respective
capability
Estimates of other capabilities are often anchored on
own capabilities with notable exceptions
Greatest scope: health/environment
Least scope: social relations/personal integrity
Issues to be Addressed
 Sample Size
 Secondary Data
 Question Type
B. Anand Hunter and Smith
(2005) Social Indicators
Research
Aim
Explore links between satisfaction
and capabilities using BHPS data
Econometric Approach
s = a + bC + e
s = a + bC + cP + e
pjhat = sj-sjhat j=10 life domains
s = a + bC + cPhat + e
Hausman Wu Test for endogeneity: c=0
Adaptation Issues
If Complete and Instantaneous ‘Goods’ would have no
observable impact on life satisfaction
There is some evidence of adaptation especially to
improvements so capabilities which impact life
satisfaction are only the utilitarian capabilities
Two Conclusions
Person specific effects significant
Secondary data exists but is sparse
AHRB Project to Measure
Capabilities
Research Question
Can we measure capabilities across a
wide spectrum of human domains
within the conventions applicable to
national household and social surveys?
Framework for Questions
Nussbaum’s List
Comprehensive
Robust (similar to others)
Don’t require universal claims
Has normative grounding
Question Categories










Life
Bodily Health
Bodily Integrity
Senses Imagination and Thought
Emotions
Practical Reason
Affiliation
Nature
Leisure
Control over one’s Environment
Bodily Health

Being able to have good health, including
reproductive health; to be adequately
nourished; to have adequate shelter
•
2 Bodily Health
•
•
•
•
•
•
•
•
•
•
•
Being able to have good health,
BHEALTH (Q57)
Does your health in any way limit your daily activities compared to most people of your age?
Yes, No. BHPS
including reproductive health;
BREPRODUCT (Q61)
Are you able to have children?
Yes, No, Don't know, Prefer not to answer
If No
Please indicate the reason(s) you are not able to have children.
I cannot have children because of: Q62_1 My age; Q62_2 I have had a vasectomy / hysterectomy; Q62-3 Another medical
condition; Q62_4 My partner being unable / unwilling; Q62_5 Another reason; Q62_6 Prefer not to answer.
to be adequately nourished
BNOURISH (Q59)
Do you eat fresh meat, chicken or fish at least twice a week?
Yes/No BHPS
If No
Q60
For which of the following reasons, if any, do you NOT eat fresh meat, chicken or fish at least twice a week? [Please tick
all that apply]
I am vegetarian/vegan, I cannot afford to, I do not like eating fresh meat, chicken or fish that often, I do not have time to prepare
fresh food., Some other reason
to have adequate shelter.
BSHELTER (Q85)
Is your current accommodation adequate or inadequate for your current needs?
More than adequate, Adequate, Inadequate, Very inadequate
BCANMOVE (Q86)
Are you prevented from moving home for any reason?
Yes, No
If yes
Q87
What prevents you from moving home?
Lack of money/finances; The Council would be unlikely to re-house me; Family responsibilities and/or schooling; I could not move
out of my current accommodation because of some other reason
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
HEALTH STATUS
Does your health in any way limit your
daily activities compared to most
people of your age?
Yes, No. BHPS
REPRODUCTION
Are you able to have children? NEW
Yes, No, Don't know, Prefer not to answer
If no please indicate the reason(s) you are not able to have
children
I cannot have children because of:
Q62_1 My age
Q62_2 I have had a vasectomy / hysterectomy
Q62_3 Another medical condition
Q62_4 My partner being unable / unwilling
Q62_5 Another reason
Q62_6 Prefer not to answer
NOURISHMENT
Do you eat fresh meat, chicken or fish at least twice a week?
Yes/No BHPS with additions
If No
(Q60)
For which of the following reasons, if any, do you NOT eat fresh
meat, chicken or fish at least twice a week? [Please tick all that
apply]
I am vegetarian/vegan
I cannot afford to
I do not like eating fresh meat, chicken or fish that often
I do not have time to prepare fresh food
Some other reason
ADEQUATE SHELTER
BSHELTER (Q85)
Is your current accommodation adequate or inadequate for your current
needs?
More than adequate, Adequate, Inadequate, Very inadequate
BCANMOVE (Q86)
Are you prevented from moving home for any reason?
Yes, No
If yes (Q87)
What prevents you from moving home?
Lack of money/finances;
The Council would be unlikely to re-house me;
Family responsibilities and/or schooling;
I could not move out of my current accommodation because of some other reason
4 Types of Capability
Indicators
Type 1. Opportunities
Type 2. Abilities
Type 3. Constraints
Type 4. Functionings + Reasons/
Universality
Analyses



Sex/age differences + links to happiness
for all Capabilities
Violent crime, gender inequalities, links to
income, personality and life satisfaction
Health as a determinant of capability
Dependent Variable
SWB2
Capability Variables
Coeff. S.Error t-Stat Prob.
BSHELTER
CDASALTP
CSEXSAT
ELOVE
EFEELING
ESTRAIN
FGOOD
FPLAN
FEVALUATE
FROLE
GCONCERN
GHOLIDAY
GWORTH
JRACEWP
JRACEWF
JSEARCH
JSKILLSW
Adjusted R-squared
Akaike info criterion
Schwarz criterion
Durbin-Watson stat
0.27
-0.17
0.25
0.08
0.11
-0.13
0.09
0.12
-0.06
0.36
0.09
0.27
0.35
-0.54
0.08
-0.05
0.08
0.53
2.62
2.73
1.83
0.09
0.08
0.07
0.03
0.03
0.04
0.03
0.02
0.03
0.05
0.03
0.08
0.04
0.17
0.03
0.02
0.03
2.93
-2.01
3.33
3.03
4.14
-3.24
3.17
5.10
-2.15
6.89
2.69
3.28
7.86
-3.18
2.26
-2.20
2.61
0.00
0.04
0.00
0.00
0.00
0.00
0.00
0.00
0.03
0.00
0.01
0.00
0.00
0.00
0.02
0.03
0.01
Gender Differences
Dependent Variable
Variable
SWB2
Female
Coeff.
BSHELTER
CDASALTP
CSEXSAT
ELOVE
EFEELING
ESTRAIN
FGOOD
FPLAN
FEVALU8
FROLE
GCONCERN
GHOLIDAY
GWORTH
JRACEWP
JRACEWF
MDSWORKF
JSEARCH
JSKILLSW
MWORK
MAGE
MAGE2
MGHI
MRSOUTH
MRMIDWLS
MRNORTH
MRSCOT
PXTRAVRT
PAGREEBL
PCONSCS
PSTABLE
POPEN
0.39
-0.18
0.14
0.12
0.04
-0.04
0.16
0.11
-0.03
0.41
0.13
0.12
0.32
-0.23
0.04
-0.40
-0.03
0.02
-0.03
-0.03
0.00
0.03
-0.16
0.14
-0.13
0.13
0.08
-0.06
-0.07
0.13
-0.01
Mean dependent var
Adjusted R-squared
Akaike info criterion
Schwarz criterion
Durbin-Watson stat
4.82
0.58
2.57
2.87
1.67
S. Error
t_Stat.
Prob.
Male
Coeff.
S. Error
t_Stat.
Prob.
0.13
0.10
0.11
0.03
0.04
0.05
0.04
0.04
0.04
0.07
0.05
0.11
0.06
0.26
0.05
0.14
0.04
0.04
0.23
0.02
0.00
0.04
0.14
0.14
0.13
0.18
0.03
0.04
0.04
0.04
0.04
3.05
-1.75
1.29
3.54
1.00
-0.69
3.93
3.17
-0.90
5.91
2.60
1.09
5.09
-0.88
0.87
-2.89
-0.87
0.44
-0.13
-1.92
1.19
0.89
-1.14
0.99
-1.00
0.73
2.39
-1.34
-1.80
3.52
-0.32
0.00
0.08
0.20
0.00
0.32
0.49
0.00
0.00
0.37
0.00
0.01
0.28
0.00
0.38
0.39
0.00
0.38
0.66
0.90
0.06
0.24
0.37
0.25
0.32
0.32
0.47
0.02
0.18
0.07
0.00
0.75
0.02
-0.18
0.29
0.02
0.16
-0.16
0.05
0.09
-0.02
0.30
0.08
0.27
0.28
-0.73
0.07
-0.11
-0.05
0.11
-0.75
0.01
0.00
0.10
-0.17
-0.11
-0.12
-0.12
0.03
0.00
0.00
0.14
-0.05
0.15
0.17
0.11
0.04
0.04
0.06
0.04
0.04
0.04
0.08
0.06
0.14
0.07
0.23
0.05
0.15
0.03
0.04
0.25
0.02
0.00
0.04
0.15
0.15
0.14
0.18
0.04
0.05
0.04
0.04
0.05
0.14
-1.10
2.70
0.62
3.91
-2.44
1.37
2.52
-0.62
3.64
1.32
2.00
3.92
-3.24
1.56
-0.73
-1.37
2.63
-3.02
0.80
-0.58
2.30
-1.14
-0.71
-0.82
-0.63
0.78
-0.08
0.01
3.32
-1.13
0.89
0.27
0.01
0.54
0.00
0.02
0.17
0.01
0.54
0.00
0.19
0.05
0.00
0.00
0.12
0.47
0.17
0.01
0.00
0.42
0.56
0.02
0.26
0.48
0.41
0.53
0.44
0.93
0.99
0.00
0.26
4.80
0.54
2.64
2.98
1.65
Violent Crime, Gender Inequalities
and Life Satisfaction
Data

Past Experience/Future Expectations of domestic, sexual and other forms of assault

Safety in local area during day and night
Analysis

Describe experience and differences between sexes

Correlations between all indicators



Examine causes of perceived future risk
Links between violence and life satisfaction
Particular link between domestic violence and income poverty
Health and Capability
Poverty
Data

Does health limit your daily activities for your age

All capabilities, life satisfaction and socio-economic covariates
Analysis

Capability differences by health status

Capabilities as a function of health, income and personality (binary and ordered
logit)

Capability profiles as a function of health income and personality (latent class)
1.0
0.8
0.6
0.4
0.2
Cluster1
Cluster2
Cluster3
Cluster4
Cluster5
Cluster6
BSHLTER
0-1 Mean
BNORISH
0-1 Mean
BCANMOVE
0-1 Mean
0.0
Cluster1
Cluster2
Cluster3
Cluster4
Cluster5
Cluster6
GWORTH
0-1 Mean
GSEXORP
0-1 Mean
GSEXORF
0-1 Mean
GRELP
0-1 Mean
GRELF
0-1 Mean
GRACEP
0-1 Mean
GRACEF
0-1 Mean
GMEAL
0-1 Mean
GIMGNE
0-1 Mean
GHOLDAY
0-1 Mean
GGENDP
0-1 Mean
GGENDF
0-1 Mean
GCONCRN
0-1 Mean
GAGEP
0-1 Mean
GAGEF
0-1 Mean
1.0
0.8
0.6
0.4
0.2
0.0
Table 6c Average Covariate Characteristics by Cluster
Cluster 1
cluster size
23.7%
HS
78.49%
mghi
3.19
pagreeable
4.73
pconscientious
5.12
popen
4.86
pstable
4.47
pextravert
4.09
mage
42.19
mmale
59.73%
mrmidwls
25.05%
mrnorth
25.15%
mrscot
10.25%
mrsouth
16.61%
Cluster 2
20.79%
82.96%
3.31
4.88
5.53
4.58
4.87
4.07
46.17
54.22%
29.76%
28.93%
8.05%
21.57%
Cluster 3
19.05%
85.74%
3.33
5.50
5.87
5.36
5.32
4.84
50.63
45.55%
20.58%
28.50%
10.64%
27.10%
Cluster 4
18.30%
61.45%
2.93
4.93
4.9
4.60
3.61
3.53
39.65
40.73%
18.30%
24.78%
12.77%
24.48%
Cluster 5
10.13%
67.95%
2.86
5.23
5.42
5.55
4.70
4.14
47.14
10.64%
18.99%
32.82%
7.02%
13.09%
Cluster 6
8.02%
47.01%
2.32
4.41
4.7
5.22
3.41
3.51
38.14
38.41%
13.47%
38.71%
3.45%
29.58%
Table 6b
Wald Statistics for Health Status and Other Predictors of Class Membership
in a Six Latent Class Model
Covariate
Health
Status
Household
Income
Controls
for Age
Personality:
pagree
pconsc
popen
pstable
pxtravt
Controls
for Regions
51.97,
5.50e-10
31.0012,
9.30e-06
No
Model Diagnostic Statistics
31.5533, 42.5177,
25.6563,
7.30e-06 4.60e-08
0.0001
21.9757, 26.8417,
12.0814,
0.00053 6.10e-05
0.034
Yes
29.036, 2.3e- 05
24.1576, 0.0002
55.0846, .3e-10
49.8809, 1.50e09
19.8605, 0.0013
No
30.7661,
1.00e-05
20.9303,
0.00083
29.3056, 2.00e05
21.8305, 0.00056
60.14, 1.10e-11
50.2556, 1.20e09
24.708, 0.00016
Yes
Notes
Cell entries indicate the value of the Wald statistic and its associated p value respectively.
Controls for age comprise age and its square. Coefficients for all models in Table 3 are available
on request.
Obesity and Opportunity Set
Dynamics:
From Rational Choice to a New Kind of
Market Failure?




Technological Change
‘Optimal Fattening’
Social Norms
Obesogenic Environments as Capabilities we
value negatively
Competition
Inappropriate Choice Sets
Decision utilities ≠ experienced utilities or
best interest utilities
Obesity and Opportunity Set
Dynamics:
From Rational Choice to Market Failure
Initial Condition:
S={a,b}, D/S={a}, aPb for all b
Competition and new feasible set:
S’={a,b1,b2}, D/S’={b1} (for axiomatics see Suzumura and Xu
forthcoming)
Result: Decision Utility ≠ Best Interest/Experienced Utility (Kahneman
et al QJE 1997)
Conclusion: Inappropriate Choice Sets can result from free individual
choices + competitive markets (New Kind of Market Failure –
applies also to debt)
Capabilities Measurement –
Some Findings to Date
It IS possible to measure capabilities…
Some secondary data exists but more can be
generated (our work identifies steps)
Sen’s 3 key equations can be estimated
Experienced utility (welfare) is highly multidimensional
Capability Inequalities and heterogeneity (eg
personality) can be found
Health is strongly related to capability deprivation
Finally…
Future plans:
discrimination
expand questions in leisure/nature/work
expand sub-population coverage to make more detailed use of
response categories (disability/reproductive choice/children)
extend applications beyond England, Scotland and Argentina
In health;
extend EQ5
do work on access to care
complete analysis of child development