Subjective wellbeing versus multidimensional wellbeing in South Africa

Pasha, Atika; Klasen, Stephan (2016). 'Subjective wellbeing versus multidimensional wellbeing in South Africa' Paper presented at the annual conference of the HDCA, Tokyo 2016.

Operationalizing the Capability Approach, Capability Measurement and Index

There now exists a large scientific literature that empirically establishes the economic link between the social and economic environment around an individual and their sense of satisfaction. Nonetheless there is a controversial divide between the welfarist and the non-welfarist approach, the later led by Sen’s capability approach. While both have their own failings, this paper attempts to reconcile both approaches under a single umbrella or wellbeing indices, choosing the Multidimensional Poverty Index as our starting point for the capability approach. These are based on a statistical method that combines the variance between a particular set of functions with the covariance structure or a particular response variable, which in our case are satisfaction and income. We find that the new weights allocated to the indicators are largely different from those that are assigned within the equal weighing scheme by Alkire and Foster. Moreover, the new indices also show that there appears to be an adaptation within household towards their current state of wellbeing, where increasing deprivation leads to a higher level of satisfaction relative to income.

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