Wietzke, Frank-Borge (2009). "A group-based measure of capability inequality" Paper presented at the 6th annual conference of the HDCA, 10-12 September 2009, Lima, Peru.

Researchers trying to measure a person’s capabilities set face a problem related to the counterfactual nature of capabilities (Sudgen 1993): While analysts may observe actually achieved (chosen) functionings it is usually more difficult to measure outcomes that were accessible to the individual but were, for various reasons, not chosen. Previous attempts to measure capabilities have typically tried to get around this problem with the help of subjective information on capabilities. Respondents are asked whether they are satisfied with their accomplishments, or options available to them, in a range of dimensions such as personal or professional achievements, social relations or health. Inferences are then drawn about the quality of a person’s capability set, controlling for other observed covariates of a person’s wellbeing, such as age, gender, employment status and so forth (Kuklys 2005: Anand / van Hees). However, it does not seem that this approach offers a fully satisfactory solution to the well known problem of adaptive preferences / cheap tastes which may bias a person’s self reported level of satisfaction with his or her capabilities. The proposed paper puts forward the idea that a more objective definition of a person’s capability set may be obtained by analysing his or her social or physical environment. Drawing heavily on recent literature which argues that individual levels of wellbeing and opportunities are usually strongly influenced by a person’s social circumstances or ‘group membership’ (Roemer 1998, Stewart 2004), an index will be presented that defines individual capability sets at the group level, using both average and absolute achievement of a person’s group as a benchmark for his or her possible individual achievements. Differences in group benchmarks will then be used to identify inequalities in individual capability spaces (shortfalls in individual achievements relative to the group benchmark will be used in the analysis of functioning inequality) The proposed approach avoids problems of using subjective data described above because it defines a person’s choices entirely on the basis of ‘objective’ and observable information. Moreover it takes account of the important idea that a person’s level of welfare will often depend on his or her relative achievements compared to living standards in the social environment (relative deprivation).