Subjective Well-Being Poverty vs. Income Poverty and Capabilities Poverty?

Empirical research by economists on poverty in developing countries has generally been concerned with its measurement in terms of income and consumption. Behind this metric lies the concept of utility, or welfare, which people are assumed to derive from income and consumption. Yet there has been little attempt to measure poverty in terms of reported utility, that is subjectively perceived welfare. In this paper we shall explore the latter approach, attempting to gain insights from new research on the economics of happiness for understanding poverty in developing countries.