Capability Approach and the Measurement of Human Welfare

Abstract

Amartya Sen's capability approach (CA) is regarded as a cornerstone for understanding human welfare. However, critics argue that its theoretical richness comes at the cost of practical measurability. This essay argues that such concerns confuse the approach's conceptual flexibility with operational failure. It first examines the conceptual strengths of the CA including its move away from income and utility towards what people are able to do and be. It then analyses the main measurement challenges identified in the literature: the selection of capabilities, trade-offs, aggregation, heterogeneity, identification and observability. Drawing on Ravallion, Robeyns, Clark, and Lutz and Kebede, the essay shows that these problems arise from flawed design choices in frameworks such as the HDI and MPI, and not from the CA itself. It then proposes alternatives. These include a multi-indicator model in which each capability is measured separately, participatory approaches to weighting, and "good enough" indicators that are transparent and practical. The essay concludes that measurement can catch up with the theory and that the CA remains one of the most comprehensive frameworks for capturing development in people's lives.