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The capability approach is an evaluative framework for individual welfare and social states. We plan to apply Amartya Sen’s Capability Model of welfare economics to higher education. The model was developed to describe the internal capabilities of an individual, which we have extended, to reflect on the state of higher education and nations.

The core concepts are Functioning and Capabilities. Sen defines Functioning and Capabilities as follow: "The primitive notion in the approach is that of functioning - seen as constitutive elements of living. A functioning is an achievement of the government: what it manages to do or to be, and any such functioning reflects, as it were, a part of the state of that Government. The capability is a derived notion. It reflects the various combinations of functioning (doings and beings) the individual or the State can achieve. It takes a certain view of living as combinations of various ‘doings and beings’. Capability reflects a person’s freedom to choose between different ways of living." (Sen)

In traditional economic welfare evaluation, particularly in the context of State expenditure on education as well as the private partnerships (Foreign Investments and Private Institutions) that we are considering in this paper, we analyze in terms of the income and expenditure.

In the capability approach, an evaluation involves the analysis of a capability set, Xi, which is defined over the different potential activities or states of being b of individual or state I

Where
qi is a vector of commodities chosen by the State
c (·) is a function that maps goods into the space of characteristics,
zi is a vector of personal characteristics and societal and environmental circumstances,
fi is a function that maps characteristics of goods into states of being or activities bi, conditional on zi,
Xi is the set of all possible bi, given the entitlement constraint Qi
The vector of commodities qi is the demand for goods.

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* Contributed by -
Raamakrishnan M. & Aparna Renganathan,
PGP1 Students,
BIM, Trichy,
Published in KRIYA, February 2006 Issue, the monthly magazine of the institute.