Paul Anand

The development of capability indicators

This paper is motivated by sustained interest in the capabilities approach to welfare economics combined with the paucity of economic statistics that measure capabilities at the individual level. Specifically, it takes a much discussed account of the normatively desirable capabilities constitutive of a good life, argued to be comprehensive at a high level of abstraction, and uses it to operationalize the capabilities approach by developing a survey instrument to elicit information about capabilities at the individual level. The paper explores the extent to which these capabilities are covariates of a life satisfaction measure of utility and investigates aspects of robustness and subgroup differences using standard socio‐demographic variables as well as a relatively novel control for personality. In substantial terms, we find there is some evidence of quantitative, but no qualitative, gender and age differences in the capabilities–life satisfaction relationship. Furthermore, we find that indicators from a wide range of life domains are linked to life satisfaction, a finding that supports multi‐dimensional approaches to poverty and the non‐materialist view that people do not just value financial income per se. Our most important contribution, however, is primarily methodological and derives from the demonstration that, within the conventions of household and social surveys, human capabilities can be measured with the aid of suitably designed statistical indicators.

The ethical investor: Exploring dimensions of investment behaviour☆

Finance theory conventionally focuses on risk and return as the factors relevant to the construction of investment portfolios. But there is evidence of a growing number of investors who wish to incorporate moral or social concerns in their decision-making. Using principal components analysis, this paper attempts to infer possible ‘non-financial’ dimensions of utility functions by considering the preferences of 125 ‘ethical investors’.

Capabilities and health

Sen’s capabilities approach offers a radical generalisation of the conventional approach to welfare economics. It has been highly influential in development and many researchers are now beginning to explore its implications for health care. This paper contributes to the emerging debate by discussing two examples of such applications: first, at the individual decision making level, namely the right to die, and second, at the social choice level. For the first application, which draws on Nussbaum’s list of capabilities, it is argued that many capabilities are ambiguously or indirectly related to the right to die, but the ability to form a concept of the good life and plan one’s own life provides a direct justification for such a right. In the second application, the focus is specifically on healthcare rationing and it is argued that, although not committed to age based rationing, the capabilities approach provides a more natural justification of age related access to health care than the fair innings argument, which is often used to justify the alleged ageism inherent in quality adjusted life years (QALY) maximisation.

The integration of claims to health-care: a programming approach

The paper contributes to the use of social choice and welfare theory in health economics by developing and applying the integration of claims framework to health-care rationing. Related to Sens critique of neo-classical welfare economics, the integration of claims framework recognises three primitive sources of claim: consequences, deontology and procedures. A taxonomy is presented with the aid of which it is shown that social welfare functions reflecting these claims individually or together, can be specified. Some of the resulting social choice rules can be regarded as generalisations of health-maximisation and all have normative justifications, though the justifications may not be universally acceptable. The paper shows how non-linear programming can be used to operationalise such choice rules and illustrates their differential impacts on the optimal provision of health-care. Following discussion of relations to the capabilities framework and the context in which rationing occurs, the paper concludes that the integration of claims provides a viable framework for modelling health-care rationing that is technically rigorous, general and tractable, as well as being consistent with relevant moral considerations and citizen preferences.

Interpreting axiomatic (decision) theory

A study is made of the use of axiomatic methods in theories of social phenomena.

Autonomy and improved performance: lessons from an NHS policy reform

Autonomy is currently seen by policy-makers in many countries as a possible mechanism for enhancing public sector performance. The authors examine a service reform (the National Health Service in England) in which more autonomy was given to better performing hospitals. Drawing on data from interviews with senior managers, the research suggests that despite being enmeshed in a politicized culture of regulations and guidance, autonomy is increasingly perceived positively and appears to depend on the extent to which organizations have the incentives and the capacity to respond to increased autonomy. The article presents findings that will be of value to policy-makers in many countries.

QALYs and the integration of claims in health-care rationing.

The paper argues against the polarisation of the health economics literature into pro- and anti-QALY camps. In particular, we suggest that a crucial distinction should be made between the QALY measure as a metric of health, and QALY maximisation as an applied social choice rule. We argue against the rule but for the measure and that the appropriate conceptualisation of health-care rationing decisions should see the main task as the integration of competing and possibly incommensurable normative claim types. We identify the main types as consequences, rights, social contracts, individual votes and community values and note situations in which the contribution of each claim type is limited. We go on to show that the integration of (at least some of) these claim types can be formalised within the mathematical framework provided by non-linear programming.

Analysis of uncertainty as opposed to risk: An experimental approach

The paper mustrates the scope for enhancing the conceptual apparatus used by agricultural economists to analyse decision-making under conditions of uncertainty. Selected empirical results from experiments on student subjects from three universities are reported. Three issues are considered. First, the reasons for choice and the understanding of a choice problem are examined. Second, attitudes towards different levels of uncertainty are measured. Third, the possibility that apparently non-normative psychological factors influence choice is explored. The paper serves to illustrate and support a number of methodological points. The major points are that a risk-uncertainty distinction is useful (contrary to the aging conventional wisdom of economic theory), that laboratory experiments can potentially provide data of use to agricultural economists, and that predictive models of choice under uncertainty may be more accurate if they take account of psychological variables which influence the decision-making processes of human subjects.

A critique of the normative and descriptive foundations of subjective probability—with reference to agriculture

Abstract Subjective probability is currently accepted as an adequate analytical framework for research into choice under uncertainty. This study tries to challenge this on a number of grounds. We suggest that Savages inferred probabilities do not take account of differences in uncertainty which may rationally determine behaviour. Secondly, utility functions used in economic theory may vary depending on the information content. Thirdly, it may provide an inefficient method of analysing observed economic behaviour. Fourthly, changes in utility functions may constitute part of what we think of as uncertainty, and fifthly, we mention problems with elicited subjective probabilities. Finally, some avenues for further research are suggested.

Decisions vs. Willingness-to-Pay in Social Choice

The paper compares use of willingness to pay values with multi-attribute utility as ways of modelling social choice problems in the environment. A number of reasons for moving away from willingness to pay are reviewed. The view proposed is that social choice is about the integration of competing claim types (utilities, rights, social contracts and beliefs about due process). However, willingness to pay is only indirectly related to the first of these and assumes an Arrovian approach, namely one in which social choice is regarded as the aggregation of peoples preferences.