Pobreza de bem-estar vs pobreza de rendimentos e pobreza de capacidades

Kingdon and Knight: Well-being poverty versus income poverty and capabilities poverty? (Summary)

· Challenging the conventional approach to the measurement of poverty.

· Basic needs, capabilities and Safety.

· Subjective well-being as an encompassing concept to value other approaches.

· Approaches to measure poverty in SA: (a) Income approach; (b) Physical Functioning; (c) Social Functioning and Security approach.

Introduction

· Use the economics of happiness to measure poverty: subjectively perceived welfare.

· Literature is sparse and recent: data limitations and little research.

· Subjective poverty as the base to weight all the alternative measures of poverty.

Insights from the literature

· Happiness explained by the individual, the household and the community level characteristics.

· Concavity of the happiness-absolute income profile. Low explanatory power of income, but high variability.

· Aspirations drive the influence of relative income.

· No exclusive association: there are other potential explanatory variables to happiness.

· Lack of practical criterion for evaluating functioning.

· New poverty line: minimum nutrition and basic necessities and the cost of social participation.

· Capabilities: physical functioning (priority) and social functioning. Inadequate functioning reduces happiness.

· No overlap, but how to aggregate different dimensions of poverty?

· Major criticism: reflects the use of capability rather than capability.

· Arguments in favour: still worthy, can isolate effects and can weight relevance and importance of other approaches.

Methodology

· They used ordered probit. Correct weighting method.

· Endogeneity and Causality.

· Well-being function (WBF): variables of physical functioning & social functioning.

· Introduce time dimension and expectations. Include control variables (demographic, geographic and social).

· Concave WBF (diminishing returns) – fulfilment of functionings.

· Linear or convex WBF – poor as more efficient “pleasure machines”.

· “Mixed” WBF (concave in SR and convex in LR) to reflect adjustment to aspirations.

The data

· SALDRU national household survey of 1993.

· Interdependencies in perceived well-being among members of the household.

Well-being poverty versus income poverty

· Poor degree of coincidence between them. r = + 0.358. Income is an imperfect predictor of happiness.

· Income p.c. determined by productive characteristics, household unemployment rate and location. Only few factors raise both income and happiness.

· Narrow impact of income on well-being poverty. Convex profile suggests adjustment to aspirations.

· Education and unemployment affect happiness via income.

· Race coeff. collapse in size – impact of unobserved var.

· Weak correlation. Impact of non-monetary factors.

Well-being poverty versus capabilities poverty

· Inclusion of basic needs variables increases explanatory power. Statistical significance.

· Inclusion of monetary poverty variables increases R-squared even more.

· Robust significance of some physical functioning variables.

· Inclusion of social functioning variables increases the explanatory power. Difficulty to capture the impact of insecurity.

· Bigger effects in household income, household assets, and race compared to other variables.

· Income poor influenced by absolute income (predominance of physical functioning); Income non-poor influenced by relative income within their race (predominance of social functioning).

Conclusions

· Subjective well-being is less imperfect, more quantifiable.

· No exclusive association of income & happiness.

· Preferred equation contains variables from:

o (a) income approach,
o (b) physical functioning approach,
o (c) social functioning approach, and
o (d) security approach

· The avenue stills opened, but one cannot generalize.

· Some Critics: Modelling Choice; Relation between missing values and education (upward bias?).