Beyond GNP and Current HDI: An Overview of The Capabilities Measurement Project

1
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

2
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!

3
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)

4
Motivation

• Problems with Expected Utility Theory
• Challenges to National Income Measurement (work
  in UK and OECD)
• Operationalising capabilities approach in high
  income countries

5
(No Transcript)
6
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

7
Limits to Gross National Product
8
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 (2006-
• extending 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

9
Some Early Work

• Human Development Index
• Schokkaert and van Ootegem (1990)
• Enrica Chiappero Martinetti (1994, 2000)
• Laderchi (1997)
• Kuklys (2005)
• Brandolini and DAlessio (1999)
• The purpose is to assess the operational
  content of the approach ie the empirical methods
  to measure functionings and capabilitiesmuch 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

10
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 Fiand his command over commodities Xi.

11
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 Fiand his command over commodities Xi.
• Our approach
• 1. Elicit indicators of Qi, Ci,j where j 160
• 2. Estimate lsi hs(Ci,j)
• where s in hs is null or allows only partial
  heterogeneity

12
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

13
Questions

• Generally, my life is happy (strongly agree...)
• 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. 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)

14
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

15
B. Anand Hunter and Smith (2005) Social
Indicators Research

• Aim
• Explore links between satisfaction and
  capabilities using BHPS data

16
Econometric Approach

• s a bC e
• s a bC cP e
• pjhat sj-sjhat j10 life domains
• s a bC cPhat e
• Hausman Wu Test for endogeneity c0

17
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

18
Two Conclusions

• Person specific effects significant
• Secondary data exists but is sparse

19
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?

20
Framework for Questions

• Nussbaums List
• Comprehensive
• Robust (similar to others)
• Dont require universal claims
• Has normative grounding

21
Question Categories

• Life
• Bodily Health
• Bodily Integrity
• Senses Imagination and Thought
• Emotions
• Practical Reason
• Affiliation
• Nature
• Leisure
• Control over ones Environment

22
Bodily Health

• Being able to have good health, including
  reproductive health to be adequately nourished
  to have adequate shelter

23

• 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

24
HEALTH STATUS

• Does your health in any way limit your daily
  activities compared to most people of your age?
• Yes, No. BHPS

25
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

26
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

27
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

28
4 Types of Capability Indicators

• Type 1. Opportunities
• Type 2. Abilities
• Type 3. Constraints
• Type 4. Functionings Reasons/ Universality

29
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

30
(No Transcript)
31
(No Transcript)
32
Gender Differences
33
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

34
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)

35
(No Transcript)
36
(No Transcript)
37
(No Transcript)
38
(No Transcript)
39
Obesity and Opportunity Set DynamicsFrom
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

40
Obesity and Opportunity Set DynamicsFrom
Rational Choice to Market Failure

• Initial Condition
• Sa,b, D/Sa, aPb for all b
• Competition and new feasible set
• Sa,b1,b2, D/Sb1 (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)

41
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)
• Sens 3 key equations can be estimated
• Experienced utility (welfare) is highly
  multi-dimensional
• Capability Inequalities and heterogeneity (eg
  personality) can be found
• Health is strongly related to capability
  deprivation

42
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