This document presents a new approach for measuring Quality of Life in Bolivia through a Quality of Life Index (QoLI). Although there is a unique conceptual framework (Sen’s capabilities approach), two versions of this Index are presented: (1) the first one is constructed using a Principal Components Analysis adapted to qualitative variables and is conceived as a tool for assessing the national government’s budget distribution amongst the 9 Bolivian States; (2) the second version is constructed using an Exploratory Factor Analysis and is conceived for designing public policies to support Bolivian international migrants’ families. Throughout the document these two versions of the QoLI are compared to the HDI, both from theoretical and methodological perspectives.

Journal of Business and Economics, July 2011, Volume 2, No. 7, pp. 547-561

ISSN 2155-7950, USA

Key words: human development index; quality of life; factor analysis

JEL codes: O15, D63, B23