Measuring welfare: latent variable models for happiness and capabilities in the presence of unobservable heterogeneity

摘要: The paper contributes to the operationalisation of capabilities approach welfare economics by developing and analyzing data on freedoms adults in Argentina. Specifically, it reports development delivery a survey instrument for measuring capabilities, calculates each respondent Nehring–Puppe type index examines distribution scores. main analytic part then goes develop generalized linear latent mixed model (GLLAMM) assessing impact life satisfaction, which allowance is made (i) unobserved heterogeneity (ii) possible endogeneity, introducing individual effects instrumenting capability variables using income other socio-economic variables. Our empirical results show that empathy, self-worth, goal-autonomy, discrimination, safety stress are statistically significant determinants decreasing order importance. concludes suggesting that, if replicated, findings have profound implications conceptualisation evaluation economic progress.