Abstract
Development is a multidimensional concept incorporating diverse social, economic, cultural and political dimensions and economic growth, though necessary, is not sufficient in itself to bring about development in this broad sense. According to Nobel Prize Laureate Amartya Sen (for example, Sen, 1985, 1999), the basic purpose of development is to enlarge people’s choices so that they can lead the life they want to. In this approach, the choices are termed ‘capabilities’ and the actual levels of achievement attained in the various dimensions are called ‘functionings’. Thus human development is the enhancement of the set of choices or capabilities of individuals whereas functionings are a set of ‘beings’ and ‘doings’ which are the results of a given choice. The concept of human development proposed by Mahbub ul Haq, in the first Human Development Report in 1990 (see UNDP, 1990), largely inspired by Sen’s various works, represents a major step ahead in the concretization of this extended meaning of development and in the effort to bring people’s lives to the centre of thinking and analysis. Since then, human development and human deprivation have been the object of extensive theoretical and empirical research. They have been studied from various angles: conceptual, methodological, operational and policy making. As it is not possible to directly observe and measure human development in its broad sense or the lack of it, they are generally constructed as composite indices based on several variables (indicators).
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Anderson, T.W. (1984) An Introduction to Multivariate Statistical Analysis. New York: John Wiley & Sons.
Balestrino, A. and N. Sciclone (2000) ‘Should we use Functionings instead of Income to Measure Well-being? Theory, and Some Evidence from Italy’. Mimeo, University of Pisa.
Ballon, P. and J. Krishnakumar (2005) ‘Estimating Basic Capabilities: A Latent Variable Approach Applied to Bolivian Data’. Paper presented at the 5th International Conference on the Capability Approach: Knowledge and Public Action, held in Paris, France.
Bartholomew, D.J. and M. Knott (1999) Latent Variable Models and Factor Analysis. London: Edward Arnold.
Biswas B. and F. Caliendo (2002) ‘A Multivariate Analysis of the Human Development Index’, Indian Economic Journal, 49 (4).
Bollen, K.A. (1989) Structural Equations with Latent Variables. New York: John Wiley & Sons.
Browne, M.W. (1984) ‘Asymptotically Distribution-free Methods for the Analysis of Covariance Structures’ British Journal of Mathematical and Statistical Psychology, 37, 62–83.
Browne, M.W. and G. Arminger (1995) ‘Specification and Estimation of Mean and Covariance Structural Models’, in G. Arminger, C.C. Clogg and M.E. Sobel (eds) Handbook of Statistical Modelling for the Social and Behavioral Sciences Newbury Park, CA: Plenum Press, pp. 311–59.
Cerioli, A. and S. Zani (1990) ‘A Fuzzy Approach to the Measurement of Poverty’, in Dagum and Zenga (eds), Income and Wealth Distribution, Inequality and Poverty. Berlin: Springer Verlag.
Cheli, B. and A. Lemmi (1995) ‘A “Totally” Fuzzy and Relative Approach to the Multidimensional Analysis of Poverty’, Economic Notes, 24, 115–34.
Chiappero Martinetti, E. (2000) ‘A Multidimensional Assessment of Well-Being based on Sen’s Functionings Approach’, Rivista Internazionale di Scienze Sociali, 2, 207–39.
Gouriéroux, C., A. Monfort and A. Trognon (1984) ‘Pseudo-maximum Likelihood Methods: Theory’, Econometrica, 52, 681–700.
Di Tommaso, M.L. (2006), ‘Measuring the Well-being of Children using a Capability Approach: An Application to Indian Data’, Working Paper CHILD no. 05/2006, University of Turin.
Hotelling, H. (1933) ‘Analysis of a Complex of Statistical Variables into Principal Components’, Journal of Educational Psychology, 24, 417–41.
Jöreskog, K. (1973) ‘A General Method for Estimatimg a Linear Structural Equation System’, in A. S. Goldberger and O.D. Duncan (eds), Structural Equation Models in the Social Sciences. New York: Seminar Press.
Jöreskog, K. (2002) ‘Structural Equation Modelling with Ordinal Variables using LISREL’, http://www.ssicentral.com/lisrel/ordinal.htm.
Jöreskog, K. and A. Goldberger (1975) ‘Estimation of a Model with Multiple Indicators and Multiple Causes of a Single Latent Variable’, Journal of the American Statistical Association, 70 (351).
Klasen, S. (2000) ‘Measuring Poverty and Deprivation in South Africa’, Review of Income and Wealth, 46, 33–58.
Krishnakumar, J. (2004) ‘Going Beyond Functionings to Capabilities: an Econometric Model to Explain and Estimate Capabilities’. Paper presented at the 4th International Conference on the Capability Approach: Enhancing Human Security, held in Pavia, Italy.
Krishnakumar, J. (2007) ‘Going Beyond Functionings to Capabilities: An Econometric Model to Explain and Estimate Capabilities’, Journal of Human Development, 8 (1), 39–63.
Krishnakumar, J. and A.L. Nagar (2006) ‘On Statistical Properties of Multidimensional Indicators based on Principal Components, Factor Analysis, MIMIC and SEM’. Working paper.
Kuklys, W. (2005) Amartya Sen’s Capability Approach: Theoretical Insights and Empirical Applications. Berlin: Springer.
Lelli, S. (2001) ‘Factor Analysis vs. Fuzzy Sets Theory: Assessing the influence of different techniques on Sen’s Functioning Approach’, Center for Economic Studies, K.U. Leuven.
Maasoumi, E. and G. Nickelsburg (1988) ‘Multidimensional Measures of Well-being and an Analysis of Inequality in the Michigan Data’, Journal of Business and Economic Statistics, 6 (3), 327–34.
McGillivray, M. (2005) ‘Measuring Non-Economic Well-being Achievement’, Review of Income and Wealth, 51 (2), 337–64.
Morris, Morris D. (1979) Measuring the Condition of the World’s Poor: The Physical Quality of Life Index. New York: Pergamon.
Muthen, B. (1983) ‘Latent Variable Structural Equation modelling with Categorical Data’, Journal of Econometrics, 22, 43–65.
Muthen, B. (1984) ‘A General Structural Equation Model with Dichotomous, Ordered Categorical and Continuous Latent Indicators’, Psychometrika, 49, 115–32.
Muthen, B. (1989) ‘Latent Variable Modelling in Heterogenous Populations’, Psychometrika, 54, 557–85.
Muthen, B. (2002) ‘Beyond SEM: General Latent Variable Modelling’, Behaviormetrika, 29 (1), 81–117.
Nagar, A.L. and S. Basu (2001) ‘Weighting Socio-Economic Indicators of Human Development (A Latent Variable Approach)’. New Delhi: National Institute of Public Finance and Policy.
Noorbaksh, F. (2003) ‘Human Development and Regional Disparities in India’, Discussion Paper. Helsinki: UNWIDER.
Qizilbash, M. (2002) ‘A Note on the Measurement of Poverty and Vulnerability in the South African Context’, Journal of International Development, 14, 757–72.
Rahman, T., R.C. Mittelhammer and P. Wandschneider (2003) ‘Measuring the Quality of Life across Countries: A Sensitivity Analysis of Well-being Indices’, WIDER International Conference on Inequality, Poverty and Human Well-being, Helsinki, Finland.
Ram, R. (1982) ‘Composite Indices of Physical Quality of Life, Basic Needs Fulfilment, and Income: A Principal Component Representation’, Journal of Development Economics, 11, 227–47.
Schokkaert, E. and L. van Ootegem (1990) ‘Sen’s Concept of the Living Standard Applied to the Belgian Unemployed’, Recherches Economiques de Louvain, 56, 429–50.
Sen, A.K. (1985) Commodities and Capabilities. Amsterdam: North-Holland.
Sen, A.K. (1993) Capability and Well-being, in M. Nussbaum and A.K. Sen (eds), pp. 30–53.
Sen, A.K. (1999) Development as Freedom. Oxford: Oxford University Press.
Slottje, D. J. (1991) ‘Measuring the Quality of Life across Countries’, The Review of Economics and Statistics, 73 (4), 684–93.
Skrondal, A. and S. Rabe-Hesketh (2004) Generalized Latent Variable Modeling: Multilevel, Longitudinal, and Structural Equation Models. Boca Raton, USA: Chapman & Hall/CRC.
UNDP (annual, from 1990 ) Human Development Report. Oxford: Oxford University Press.
Wagle, U. (2005) ‘Multidimensional Poverty Measurement with Economic Well-being, Capability and Social Inclusion: A Case from Kathmandu, Nepal’, Journal of Human Development, 6 (3), 301–28.
White, H. (1982) ‘Maximum Likelihood Estimation of Misspecified Models’, Econometrica, 50, 1–26.
Editor information
Editors and Affiliations
Copyright information
© 2008 Palgrave Macmillan, a division of Macmillan Publishers Limited
About this chapter
Cite this chapter
Krishnakumar, J. (2008). Multidimensional Measures of Poverty and Well-being Based on Latent Variable Models. In: Kakwani, N., Silber, J. (eds) Quantitative Approaches to Multidimensional Poverty Measurement. Palgrave Macmillan, London. https://doi.org/10.1057/9780230582354_7
Download citation
DOI: https://doi.org/10.1057/9780230582354_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-28165-7
Online ISBN: 978-0-230-58235-4
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)