Measuring multidimensional inequality of opportunity

Martyna Kobus, Marek Kapera () and Vito Peragine
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Martyna Kobus: Polish Academy of Sciences
Marek Kapera: Polish Academy of Sciences

No 528, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper develops a normative approach to the measurement of ex-ante inequality of opportunity in a multidimensional setting, i.e., when the individual outcome is represented by a multidimensional variable. We characterize three classes of social welfare functions, all endorsing ex ante compensation but each of them reflecting a specific reward principle: (1) utilitarian, (2) agnostic and (3) averse. The first class is implemented via generalized Lorenz Dominance applied to each attribute separately. The agnostic and inequality averse classes are implemented by a welfarist Lorenz ordering, namely, of type-aggregate utilities. In the case of inequality-averse class, utility functions are submodular, hence capturing the dependence between attributes. We also develop normative inequality indices (Atkinson, 1970; Kolm 1969; Sen, 1973) for the classes of welfare functions and study their properties. Finally, we propose an empirical applications of the methods developed in the paper: by using the National Longitudinal Study of Adolescent to Adult Health (Add Health) we evaluate inequality of opportunity in U.S. for the case of three dimensions of individual outcomes, namely, education, health and income.

Keywords: Equality of opportunity; economic inequality; multidimensional welfare; multidimensional inequality; Lorenz dominance.. (search for similar items in EconPapers)
JEL-codes: D63 I32 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-03
New Economics Papers: this item is included in nep-upt
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Related works:
Working Paper: Measuring multidimensional inequality of opportunity (2020)
Working Paper: Measuring multidimensional inequality of opportunity (2020)
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