A Capability Approach to Evaluating well-being and Equality in Housing: Clear Conceptual Difference but Unclear Practical Difference?

Figures & data

Table 1. Method to test the commensurability of measures of well-being in housing.

	Basic economic means for housing	Satisfaction with housing	Basic housing functioning	Basic ability for housing	Number of measures jointly identifying as deprived
Person 1	Non-deprived	Non-deprived	Non-deprived	Non-deprived	0
Person 2	Deprived	Deprived	Deprived	Deprived	4
Person 3	Non-deprived	Non-deprived	Non-deprived	Deprived	1
Person 4	Deprived	Deprived	Deprived	Non-deprived	3
Person 5	Deprived	Non-deprived	Deprived	Deprived	3
Person i	…	…	…	…	n

Table 2. Method to compare evaluation approaches to housing deprivation.

Measure 1	Non-deprived		Deprived
Measure 2	Non-deprived	Deprived	Non-deprived	Deprived
Case category	I (overlap)	II (mismatch)	III (mismatch)	IV (overlap)

Table 3. Method for assessing inequality in conversion efficacy.

Subgroups of population (e.g. household type; ethnic background)	Non-deprived of means	Non-deprived of ends	Assessment of difference in conversion rates among subgroups
Ideal score	non-deprived of means (M)	non-deprived of means (M) and non-deprived of ends (E)	(E/M) – 1 = 0
By household type Single (s) Multi-person (m) Single parent (p)	Ms % Mm % Mp %	Es % Em % Ep %	(Es /Ms) – 1 (Em/Mm) – 1 (Ep/Mp) – 1
By …	…	…	…
By …	…	…	…

Table 4. Selected indicators and deprivation cut-offs.

Evaluation approach	Indicators	Household members are deprived if:
Economic means-oriented	Sufficient income for adequate housing	Taxable household income is less than or equal to 33,614 euros per year per household (the social housing eligibility threshold in 2011)
Satisfaction-oriented	Dwelling satisfaction	The satisfaction level is a score of 6 or lower than 6 (out of the 11-point scale)
Functioning-oriented: basic housing functionings	Living in adequate housing (housing adequacy)	One of the following conditions is met: the number of rooms is less than the sufficiently required number: one for a single household, one per couple, one per pair of children under 10 years of age, one per person for the rest, and one shared living room; and leaking roof, damp walls/floors, rotten window frames/floors, too dark, too noisy, or inadequate heating,
Potential-oriented: basic abilities for housing	Basic financial literacy	Either the head of household or the spouse incorrectly answered the two survey questions that test basic knowledge of compound interest and inflation^[1]

Note: [1] For the financial literacy test questions, see Table A1 in the appendix.

Figure 1. Predictability of the deprivation of basic capabilities for housing by income and of dwelling dissatisfaction by basic capabilities for housing.

Table 5. Deprivation rates for each indicator.

	Means-oriented measure	Satisfaction-oriented measure	Measures of basic capabilities for housing
			Functioning-oriented	Potential-oriented
	Sufficient income for adequate housing	Dwelling satisfaction	Living in adequate housing	Basic financial literacy
Non-deprived	77.0%	88.6 % (70.6%)^[1]	78.7%	70.3%
Deprived	23.0%	11.4% (29.4%)^[1]	21.3%	29.7%

Note: [1] the incidence rates when the average score of 8 is applied as the cut-off (i.e. 0–7 = deprived, 8–10 = not deprived)

Table 6. Correlations between the compared measures of well-being in housing.

	(1)	(2)	(3)	(4)
	Income	Dwelling satisfaction	Housing adequacy	Financial literacy
Income	1.00
Dwelling satisfaction	0.093**	1.00
Housing adequacy	0.189**	0.312**	1.00
Financial literacy	0.229**	0.027*	0.104**	1.00

Note: Spearman’s rank-order correlation; **p < 0.01; *p < 0.05.

(1) income refers to taxable household income; (2) dwelling satisfaction is at 11-scale (3) the ordinal values of housing adequacy refer to the number of deprived dwelling conditions (maximum 7); (4) the ordinal values of financial literacy refer to the number of correct answers (maximum 4).

Table 7. Degree of consistency in identification of deprived persons: a test of in/commensurability.

Number of measures jointly identifying a person as deprived	With the cut-offs set for the study	(2) With lowered cut-offs for a robust check
0 (identified as non-deprived by all four measures)	44.6 %	53.1 %
1 (identified as deprived by one measure)	33.2 %	29.9 %
2 (identified as deprived by two measures)	15.9 %	13.1 %
3 (identified as deprived by three measures)	5.3 %	3.4 %
4 (identified as deprived by all four measures)	0.9 %	0.5 %
Total	100.0	100.0

Note: The lowered cut-offs applied for the robust check (column 2) were set as follows: housing is inadequate if two or more problems of dwelling conditions exist; members of households are financially illiterate only if both the household head and spouse incorrectly answered the two survey questions; members of households are dissatisfied with their dwelling when the satisfaction level is 5 or lower. No changes to the income threshold as it follows the current social housing policy of the study country.

Table 8. Pairwise comparisons of target group identifications.

		Sufficient income for adequate housing	Dwelling satisfaction	Living in adequate housing	Basic financial literacy
Study population deprived by each measure		23%	11% (6%)	21% (9%)	30% (19%)
Percentage of population simultaneously identified in the column and row measures
Sufficient income for adequate housing	23%	–
Dwelling satisfaction	11% (6%)	3.9% (2.2%)	–
Living in adequate housing	21% (9%)	7.6% (3.2%)	5.7% (2.0%)	–
Basic financial literacy	30% (19%)	9.1% (6.9%)	4.7% (2.1%)	7.5% (2.4%)	–

Note: Figures in parenthesis: the percentage of population jointly identified with lowered cut-offs (applied the same rule in Table 7).

Figure 2. Degree of overlap between deprived groups: basic economic means and housing functioning.

Note: see Table B1 in the appendix for detailed figures.

Figure 3. Degree of overlap between deprived groups: housing satisfaction and basic housing functioning.

Note: see Table B1 in the appendix for detailed figures.

Figure 4. Degree of overlap between deprived groups: basic housing functioning and ability for housing.

Note: see Table B1 in the appendix for detailed figures.

Figure 5. Degree of overlap between deprived groups: basic economic means and ability for housing.

Figure 6. Degree of overlap between deprived groups: housing satisfaction and basic ability for housing.

Note: see Table B1 in the appendix for detailed figures.

Figure 7. Conversion efficacy by subgroups: from basic economic means to basic housing functioning.

Note: see Table B2 in the appendix for detailed figures.

Figure 8. Different degrees of simultaneous deprivations in housing situation among subgroups.

Note: see Table B3 in the appendix for detailed figures.

Table A1. Survey questionnaires on financial literacy

Question 1. Suppose you have 100 euros on a savings account and the interest is 2% per year. How much do you think you will have on the savings account after five years, assuming that you leave all your money in this savings account: more than 102 euros, exactly 102 euros, less than 102 euros? 1 more than 102 euros 2 exactly 102 euros 3 less than 102 euros 4 I don’t know 5 now 5 I would rather not say

Question 2. Suppose that the interest on your savings account is 1% per year and that inflation amounts to 2% per year. After 1 year, would you be able to buy more, exactly the same, or less than you could today with the money in that account? 1 more than today 2 exactly the same as today 3 less than today 4 I don’t know 5 now 5 I would rather not say

Question 3. A share in a company usually offers a more certain return than an investment fund that only invests in shares. 1 true 2 not true 3 I don’t know 4 now 4 I would rather not say

Question 4. If the interest rate goes up, what should happen to bond prices? 1 they should increase 2 they should decrease 3 they should stay the same 4 none of the above 5 I don’t know 6 now 6 I would rather not say

Source: CentERdata, Tilburg University, Netherlands, 2011

Note: For the indicator design in this article, respondents who correctly answered Question 1 and Question 2 were considered to have basic financial literacy.

Table B1. Incidence of pairwise overlaps and mismatches between measures.

Overlaps				Mismatch
Results with the cut-offs applied for the main analysis
Income: sufficient	– housing: adequate	62.55%		Income: sufficient	– housing: inadequate	13.61%
Income: insufficient	– housing: inadequate	7.61%		Income: insufficient	– housing: adequate	16.23%
housing: adequate	– satisfied	72.94%		housing: adequate	– unsatisfied	5.79%
housing: inadequate	– unsatisfied	5.71%		housing: inadequate	– satisfied	15.57%
Income: sufficient	– satisfied	68.62%		Income: sufficient	– unsatisfied	7.74%
Income: insufficient	– unsatisfied	3.86%		Income: insufficient	– satisfied	19.78%
Income: sufficient	– financially literate	56.32%		Income: sufficient	– financially illiterate	20.82%
Income: insufficient	– financially illiterate	9.07%		Income: insufficient	– financially literate	13.79%
satisfied	– financially literate	64.01%		satisfied	– financially illiterate	25.42%
unsatisfied	– financially illiterate	4.71%		unsatisfied	– financially literate	5.85%
housing: adequate	– financially literate	57.24%		housing: adequate	– financially illiterate	22.61%
housing: inadequate	– financially illiterate	7.53%		housing: inadequate	– financially literate	12.62%
Results with the lowered cut-offs
Income: sufficient	– housing: adequate	70.19%		Income: sufficient	– housing: inadequate	5.97%
Income: insufficient	– housing: inadequate	3.16%		Income: insufficient	– housing: adequate	20.69%
housing: adequate	– satisfied	86.67%		housing: adequate	– unsatisfied	4.38%
housing: inadequate	– unsatisfied	1.96%		housing: inadequate	– satisfied	6.99%
Income: sufficient	– satisfied	72.12%		Income: sufficient	– unsatisfied	4.25%
Income: insufficient	– unsatisfied	2.16%		Income: insufficient	– satisfied	21.48%
Income: sufficient	– financially literate	65.18%		Income: sufficient	– financially illiterate	11.96%
Income: insufficient	– financially illiterate	6.86%		Income: insufficient	– financially literate	16.00%
satisfied	– financially literate	77.61%		satisfied	– financially illiterate	16.77%
unsatisfied	– financially illiterate	2.09%		unsatisfied	– financially literate	3.53%
housing: adequate	– financially literate	75.74%		housing: adequate	– financially illiterate	16.48%
housing: inadequate	– financially illiterate	2.43%		housing: inadequate	– financially literate	5.35%

Table B2. Counting-based assessment of inequality in conversion efficacy among subgroups.

		(1)	(2)	(3)
		Have sufficient income for adequate housing	Have sufficient income for adequate housing and living in adequate housing	From basic economic means for housing to basic housing functioning
				Conversion efficacy gaps = (2)/(1) – 1
Ideal score (i.e. no discrepancy)		–	–	0.000
Total		76.15 %	62.55 %	−0.179
Urbanization
	Extremely urban	69.77 %	51.70 %	−0.259
	Very urban	76.80 %	62.45 %	−0.187
	Moderately urban	75.79 %	63.98 %	−0.156
	Slightly urban	78.02 %	66.69 %	−0.145
	Not urban	77.84 %	62.77 %	−0.194
Tenure type
	Homeowners	83.73 %	72.42 %	−0.135
	Tenants	51.66 %	30.71 %	−0.405
Age group (years)
	18–29	79.51 %	61.05 %	−0.232
	30–64	80.04 %	66.38 %	−0.171
	65+	52.21 %	46.77 %	−0.104
Household type
	Single household	40.80 %	31.30 %	−0.233
	Multi-person household	83.34 %	69.69 %	−0.164
	Single parent household	57.48 %	37.61 %	−0.346
Origins
	Dutch background	74.20 %	62.53 %	−0.157
	Western background; 1st generation	65.84 %	53.42 %	−0.189
	Western background; 2nd generation	74.01 %	59.91 %	−0.190
	Non-Western background; 1st generation	66.67 %	38.02 %	−0.430
	Non-Western background; 2nd generation	62.67 %	36.00 %	−0.426

Table B3. Degrees of simultaneous deprivations in housing situation by subgroups (%).

		(1)		(2)		(3)		(4)	(5)
		Number of simultaneous deprivations
		None	One		Two		Three (Three +)		Four
Total		44.63	33.22		15.92		5.32		0.91
Urbanization
	Extremely urban	36.75	31.98		20.90		8.98		1.40
	Very urban	45.91	32.65		16.10		4.64		0.71
	Moderately urban	46.55	32.48		13.72		6.11		1.14
	Slightly urban	46.69	34.24		14.82		3.38		0.86
	Not urban	42.05	35.21		16.80		5.33		0.60
Tenure type
	Homeowners	52.81	33.38		11.21		2.45		0.15
	Tenants	17.96	32.70		31.30		14.67		3.37
Age group (years)
	18–29	43.25	29.49		19.79		6.82		0.66
	30–64	46.34	33.86		13.77		5.12		0.91
	65+	38.02	35.32		21.26		4.59		0.81
Household type
	Single household	23.16	37.89		28.68		9.21		1.05
	Multi-person household	49.57	32.48		13.34		4.12		0.49
	Single parent household	24.86	35.26		20.23		13.58		6.07
Origins
	Dutch background	44.86	34.63		15.39		5.13 ^[1]		-
	Western background; 1st generation	32.37	36.69		17.99		12.95 ^[1]		-
	Western background; 2nd generation	40.10	32.18		21.78		5.94 ^[1]		-
	Non-Western background; 1st generation	19.86	29.08		29.79		21.28 ^[1]		-
	Non-Western background; 2nd generation	22.03	25.42		23.73		28.73 ^[1]		-

[1] The observations in Columns 4 and 5 were combined into “Three +” because the number of observations in Column 4 was very low so that the households and individuals had risks to be recognized