A real options approach to measuring freedom in Sen's capabilities approach

Sovan Mitra

International Journal of Sustainable Economy, 2022, vol. 14, issue 1, 98-110

Abstract: Sustainability has gained increasing prominence in research literature, with environmental and social issues becoming more important in economic issues. One of the normative approaches to addressing sustainability issues has been applying Sen's capabilities approach. One of the advantages of Sen's capabilities approach is that it is able to take into account a wider range of issues in decision making compared to alternative methods, such as the ethical importance of freedom. A key problem in operationalising Sen's capabilities approach is providing a quantitative framework for measuring the freedom in decisions. In this paper we propose a method for operationalising Sen's capabilities approach by using the real options analysis as a framework to quantifying the freedom in decisions. The real options analysis is a well-established method of modelling economic decisions and using such an approach we propose quantifying the freedom in decisions in terms of the flexibility to exercise decision under the real options analysis. In this paper we show how real options analysis can be used to quantify and indicate the freedom of decisions in terms of Sen's capabilities approach. This paper provides a new framework for analysing decisions under Sen's capabilities approach and examples are provided.

Keywords: real options; capabilities approach; operationalising; freedom; welfare. (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=119716 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijsuse:v:14:y:2022:i:1:p:98-110

Access Statistics for this article

More articles in International Journal of Sustainable Economy from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().