The Neglected Dimension of Well-Being: Analyzing the Development of “Conversion Effciency' in Great Britain

摘要

In Amartya Sen’s capability approach, policy makers can focus on di?erent levels to in?uence the well-being of a society. We argue that improving capability to function as well as absolute levels of functioning achievement should be complemented by attention given to improving individuals’ “conversion e?ciency”, i.e. the e?ciency with which individual resources are converted into well-being. In order to examine e?ects of policies on conversion e?ciency and to better understand the trajectories of human well-being over time, it is necessary to measure the development of conversion e?ciency. We suggest an intertemporal index of conversion e?ciency estimated via a nonparametric order-m approach borrowed from the production e?ciency literature to analyze this development of our welfare measure. We exemplify this approach using micro level data from the British Household Panel Survey (BHPS), tracking conversion e?ciency for a set of basic functionings in Great Britain from 1991 to 2006. We ?nd that under 30% of the British populace were e?cient in their conversion of resources into functionings during the sample horizon. Moreover, age, education and self-employment increase an individual’s conversion e?ciency, while living in London, being disabled and being separated, divorced or widowed all decrease conversion e?ciency. Being married also decreases the conversion e?ciency and we ?nd few evidence of gender disparities in conversion e?ciency.