Ruhr Economic Papers

TU Dortmund, 07/2012, 40 S./p., 8 Euro, ISBN 978-3-86788-413-6 DOI: 10.4419/86788413

Abstract

The present paper explores the link between poverty as capability deprivation and current life satisfaction. Using German panel data, I examine both whether capability deprivation does hurt and whether individuals eventually adapt. To detect capability deprivation I suggest relying on the nonconsumption of commodities pivotal for certain functioning achievements. The results indicate that poverty as capability deprivation reduces life satisfaction in a statistically and economically significant way. Moreover, the results suggest that individuals fail to adapt within the subsequent four to six years.