Oxford Poverty & Human Development Initiative (OPHI) Oxford Department of International Development Queen Elizabeth House (QEH), University of Oxford OPHI WORKING PAPER NO. 94 The Capability Approach and Well-Being Measurement for Public Policy Sabina Alkire* March 2015 Abstract This chapter presents Sen’s capability approach as a framework for well-being measurement with powerful and ongoing relevance to current work on measuring well-being in order to guide public policy. It discusses how preferences and values inform the relative weights across capabilities, then draws readers’ attention to measurement properties of multidimensional measures that have proven to be policy-relevant in poverty reduction. It presents a dual-cutoff counting methodology that satisfies these principles and outlines the assumptions that must be fulfilled in order to interpret ensuing indices as measuring capability poverty. It then discusses Bhutan’s innovative extension of this methodology in the Gross National Happiness Index and reflects upon whether it might be suited to other contexts. It closes with some remarks on relevant material in other Handbook chapters. Keywords: capability approach, Amartya Sen, preferences, ordinal data, relative weights, AF dual-cutoff counting methodology, multidimensional poverty, Bhutan’s Gross National Happiness Index. JEL classification: D60, I30, I32, A13 Acknowledgements This is a chapter 'The Capability Approach' drafted for Oxford Handbook on Well-being and Public Policy. The early sections of this chapter drew on a 2008 unpublished background note for the Sarkozy Commission. I am grateful to Amartya Sen, James Foster, and Enrica Chiappero-Martinetti for discussion and comments; I am also grateful to participants in the March 2014 Handbook workshop for * Oxford Poverty & Human Development Initiative, Oxford Department of International Development, University of Oxford, 3 Mansfield Road, Oxford OX1 3TB, UK, +44-1865-271915,
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