A Dissimilarity Index of Multidimensional Inequality of Opportunity

A recent literature on inequality of opportunity  offers quantitative tools for comparisons and measurement based on stochastic dominance criteria  and traditional inequality indices. In this paper I suggest an additional way of assessing inequality of opportunity and operationalizing Roemer’s (1998) notion of equality of opportunity with an index of dissimilarity across distributions. The index is based on a traditional homogeneity test of multinomial distributions and is more helpful than other tools when both circumstances and advantages/outcomes are multidimensional. It also highlights the correspondence between dissimilarity  in outcomes across sets of circumstances and the degree of association between circumstances and outcomes. An empirical application measures changes in inequality of opportunity from an old to a young cohort in Peru. 

Author: Gaston Yalonetzky

Year: 2009

Citation: Yalonetzky, G. (2009). 'A Dissimilarity Index of multidimensional inequality of opportunity', OPHI Working Paper 28, Oxford Poverty and Human Development Initiative (OPHI), University of Oxford.

This paper is also published in The Journal of Economic Inequality, 2012, Vol. 10, pp. 343–373.