A Dissimilarity Index of Multidimensional Inequality of Opportunity (Revised and Updated)

A recent literature on inequality of opportunity o¤ers 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 with two indices of dissimilarity across distributions. The indices are based on a traditional homogeneity test of multinomial distributions and are similar to the square coe¢ cient of variation (Reardon and Firebaugh, 2002). Their properties are studied, as well as their usefulness and limitations in applications when both circumstances and advantages/outcomes are multidimensional. An empirical application measures changes in inequality of opportunity from an old to a young cohort in Peru. The importance of assessing the sensitivity of the results to group defnitions and group proportions is highlighted.

Author: Gaston Yalonetzky

Year: 2010

 Citation: Yalonetzky, G. (2010). 'A dissimilarity index of multidimensional inequality of opportunity (revised and updated)', OPHI Working Papers 39, Oxford Poverty and Human Development Initiative (OPHI), University of Oxford.

Also published in The Journal of Economic Inequality, 2012, Vol. 10(3), pp. 343 - 373.