Measuring Standard of Living in the UK - An Application of Sen's Functioning Approach Using Structural Equation Models

Wiebke Kuklys ()

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: This paper contributes to the multidimensional welfare measurement literature inspired by Sen's functioning approach. After reviewing the different statistical techniques used in multidimensional welfare measurement, we suggest structural equation modelling as an appropriate alternative to measure and model the achievement of welfare. Functionings are conceptualised as latent variables which can only be measured with error. We assess what determines the achievement of these functionings, and compare the numerical functionings values with income in a simple poverty analysis.

Keywords: Welfare measure; capability approach; structural equation modelling; poverty analysis (search for similar items in EconPapers)
JEL-codes: C43 D63 I31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-edu
Date: 2004-02
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Persistent link: http://EconPapers.repec.org/RePEc:esi:discus:2004-11

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