Essays on Poverty and Wellbeing

Abstract

Although economic growth has brought significant improvements in the standard of living in the UK over recent decades, there are still individuals living in poverty. Furthermore poverty in the UK is expected to rise. Although monetary poverty has wide ranging impacts such as poor health, low educational attainment and employability and reduced life expectancy, it does not (in the form of a poverty line at 60% of the median equivalised household income) appear to have an impact on wellbeing when the threshold was tested. Instead, multidimensional poverty – that purported by the Capabilities Approach – is a more individually relevant measure of poverty. Using a list, developed by Nussbaum, of core capabilities seen as essential for human life, capability measures were taken from the British Household Panel Survey. In analysis, some are found to be significant determinants of wellbeing, individually and in sum. Furthermore, individuals within the dataset experience loss aversion to capabilities. This thesis concludes that poverty measurement should be meaningful at the individual level, and to that aim, the Capabilities Approach provides a richer and more relevant evaluation of what poverty really means.