• The paper contributes to the operationalisation of the capabilities approach to welfare economics by developing and analyzing data on the freedoms of adults in Argentina. Specifically, it reports on the development of a survey instrument for measuring capabilities, calculates for each respondent a Nehring-Puppe type index of their capabilities, and examines the distribution of index scores. Themain analytic part of the paper then goes on to develop a generalized linear latent and mixed model (GLLAMM) for assessing the impact of capabilities on life satisfaction, in which allowance is made for (i) unobserved heterogeneity and (ii) possible endogeneity by introducing latent individual effects and by instrumenting capability variables using income and other socio-economic variables. Our empirical results show that empathy, self-worth, goal-autonomy, discrimination, safety and stress are statistically significant determinants of life satisfaction, in a decreasing order of importance. The paper concludes by suggesting that, if replicated, the findings have profound implications for the conceptualisation and evaluation of economic progress.

  • capabilities, Subjective wellbeing, Freedoms, GLLAMM, Happiness, Instrumental variables, Multi-dimensionality
  • primary data
  • micro
  • Capability Survey
  • Argentina
  • Health, Freedom of Political Expression, Freedom of Political Participation, Freedom of Religion, Freedom of Thought, Emotional Capabilities, Security, Environment and Social Relations, Discrimination, Work
  • 1. Composite Indicators and Distributional Measures
    2. Latent Variable Modelling (Generalised Linear Latent and Mixed Modelling)
    3. Individual Unobserved Heterogeneity