Capabilities vis-a-vis Happiness: Evidence from Pakistan

While research on happiness and capabilities has been growing rapidly, they seldom treated together for useful policy insights. Using a unique self-reported questionnaire about mental well being in the Pakistan Socio-Economic Survey (PSES), we measure Sen’s capabilities (freedom, functionings and efficiency) of “being achieved” and compare them with our happiness indicator of subjective well-being. It is shown that the PSES capability indicators of subjective well-being (SWB) provide distinctive information while together with the happiness indicator they capture additional insights about SWB. We show that capabilities are the most important and stable determinants of happiness. We rank policy units on the basis of capabilities and happiness, which turn out to be quite different from each other, and show that this provides useful policy insight.