One of the most significant theoretical contributions to welfare analysis across a range of disciplines has been the development of the capabilities framework by Sen and others. Motivated by the claim that freedom should play a key role in social evaluation, the capabilities framework suggests that we consider what it is that people are free to do, as well as what they actually do. Using data from the British Household Panel Survey in conjunction with a list of substantial values posited by Martha Nussbaum, we contribute to the operationalisation and testing of this approach. Specifically, we suggest that commonly used secondary data sources do provide some information about the capabilities people have and that this can be incorporated into models of (subjective) well-being such as those used by a growing number of labour and health economists. We find evidence that a wide range of capabilities exhibit statistically significant relations to well-being that the relations are complex and slightly different for men and women, and conclude with suggestions for future developments.
Anand, P., Hunter, G., &Smith, R. (2005). Capabilities and well-being: evidence based on the Sen–Nussbaum approach to welfare. Social Indicators Research, 74(1), 9-55.