A Dissimilarity Index of Multidimensional Inequality of Opportunity

Oxford Poverty & Human Development Initiative (OPHI)
Oxford Department of International Development
Queen Elizabeth House (QEH), University of Oxford

OPHI WORKING PAPER NO. 39
A Dissimilarity Index of Multidimensional Inequality of
Opportunity
Gaston Yalonetzky *
November 2010
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 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 definitions and group proportions is highlighted.

*Oxford Poverty & Human Development Initiative, University of Oxford. E-mail address: [e-mail].
This study has been prepared within the OPHI theme on multidimensional measurement.
OPHI gratefully acknowledges support for its research and activities from the Government of Canada through the
International Development Research Centre (IDRC) and the Canadian International Development Agency (CIDA), the
Australian Agency for International Development (AusAID), and the United Kingdom Department for International
Development (DFID).
ISSN 2040-8188

ISBN 978-1-907194-23-8

A Dissimilarity Index of Multidimensional Inequality of
Opportunity
Gaston Yalonetzky
November 7, 2010

Abstract
A recent literature on inequality of opportunity o¤ers quantitative tools for comparisons

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