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A dissimilarity index of multidimensional inequality of opportunity

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Abstract

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 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 coefficient of variation (Reardon and Firebaugh, Sociol Method 32:33–67, 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 definitions and group proportions is highlighted.

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  1. OPHI, University of Oxford, Oxford, England

    Gaston Yalonetzky

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  1. Gaston Yalonetzky
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Correspondence to Gaston Yalonetzky.

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Yalonetzky, G. A dissimilarity index of multidimensional inequality of opportunity. J Econ Inequal 10, 343–373 (2012). https://doi.org/10.1007/s10888-010-9162-z

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  • DOI: https://doi.org/10.1007/s10888-010-9162-z

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