A Real Options Approach To Measuring Freedom In Sen’s Capabilities Approach : WestminsterResearch

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Title	A Real Options Approach To Measuring Freedom In Sen’s Capabilities Approach
Type	Journal article
Authors	Mitra, S.
Abstract	Sustainability has gained increasing prominence in research literature, with environmental and social issues becoming more important in economic issues. One of the normative approaches to addressing sustainability issues has been applying Sen’s Capabilities Approach. One of the advantages of Sen’s Capabilities Approach is that it is able to take into account a wider range of issues in decision making compared to alternative methods, such as the ethical importance of freedom. A key problem in operationalising Sen’s Capabilities Approach is providing a quantitative framework for measuring the freedom in decisions. In this paper we propose a method for operationalising Sen’s Capabilities Approach by using the Real Options Analysis as a framework to quantifying the freedom in decisions. The Real Options Analysis is a well-established method of modelling economic decisions and using such an approach we propose quantifying the freedom in decisions in terms of the flexibility to exercise decision under the Real Options Analysis. In this paper we show how Real Options Analysis can be used to quantify and indicate the freedom of decisions in terms of Sen’s Capabilities Approach. This paper provides a new framework for analysing decisions under Sen’s Capabilities Approach and examples are provided.
Keywords	real options
	capabilities approach
	operationalising
	freedom
	welfare
Journal	International Journal of Sustainable Economy
Journal citation	14 (1), pp. 98-110
ISSN	1756-5804
	1756-5812
Year	2022
Publisher	InderScience
Accepted author manuscript	Sen CAM Paper IJSE R1 REF.pdf License CC BY-ND 4.0 File Access Level Open (open metadata and files)
Digital Object Identifier (DOI)	https://doi.org/10.1504/IJSE.2022.119716
Published online	16 Dec 2021
Published in print	2022
Funder	None

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A Real Options Approach To Measuring Freedom In Sen’s Capabilities Approach

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