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Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach

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  • Paolo Li Donni
  • Juan Rodríguez

    ()

  • Pedro Rosa Dias

Abstract

The empirical analysis of inequality of opportunity centres on disparities between social types, defined by the exposure to circumstances beyond individual control. Despite this, its main theoretical foundation—the Roemer model—does not indicate how to carry out, in practice, the required partition of the population into such types. This paper operationalises this definition of social types using a latent classes approach. Our specification is embedded in a probabilistic extension of the canonical Roemer model, which assumes that the relevant population consists of a finite number of latent types, from which each individual can be treated as a random draw. This makes possible the use of the full set of circumstances in the data, allows for unobserved individual heterogeneity and does not require an ex-ante specification of the number of types by the researcher. Our approach is illustrated by an empirical application featuring a large UK cohort study that was used in earlier literature to examine inequalities of opportunity in a wide array of social outcomes. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Paolo Li Donni & Juan Rodríguez & Pedro Rosa Dias, 2015. "Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 673-701, March.
  • Handle: RePEc:spr:sochwe:v:44:y:2015:i:3:p:673-701
    DOI: 10.1007/s00355-014-0851-6
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    References listed on IDEAS

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    Cited by:

    1. Davillas, Apostolos & Jones, Andrew M., 2018. "Ex ante inequality of opportunity in health, decomposition and distributional analysis of biomarkers," ISER Working Paper Series 2018-13, Institute for Social and Economic Research.
    2. Paolo Brunori & Vito Peragine & Laura Serlenga, 2016. "Upward and downward bias when measuring inequality of opportunity," SERIES 05-2016, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Sep 2016.
    3. Gustavo A. Marrero & Juan G. Rodriguez, 2014. "Inequality and development: the role of opportunities and free-will," Working Papers 327, ECINEQ, Society for the Study of Economic Inequality.
    4. Paolo Brunori & Paul Hufe & Daniel Gerszon Mahler, 2017. "The Roots of Inequality: Estimating Inequality of Opportunity from Regression Trees," Working Papers - Economics wp2017_18.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    5. Juan C. Palomino & Gustavo A. Marrero & Juan G. Rodriguez, 2016. "Channels of inequality of opportunity: The role of education and occupation in Europe," Working Papers 411, ECINEQ, Society for the Study of Economic Inequality.

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