Monitoring Inequality among Social Groups: A Methodology Combining Fuzzy Set Theory and Principal Component Analysis

The present paper contributes to operationalizing the Capability Approach by proposing a methodology for the design of sets of indicators for monitoring inequality among social groups based on census and household surveys. The result is a set of indicators and synthetic indices that can be disaggregated by social groups, in a way that allows the monitoring of inequalities in the overall achievement either of fundamental rights or of specific rights. The methodology combines the heuristic power of Principal Component Analysis in offering empirical evidence for the aggregation of indicators with the operational advantage of Fuzzy Set Theory for their final design and measurement. The paper emphasizes the complementarities of these statistical techniques. The methodology is illustrated by the design of a set of indicators for monitoring housing adequacy in the Venezuelan context.