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Upward and downward bias when measuring inequality of opportunity

Author

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  • Paolo Brunori

    (Dipartimento di Scienze Economiche e Metodi Matematici, Università di Bari)

  • Vito Peragine

    (Dipartimento di Scienze Economiche e Metodi Matematici, Università di Bari)

  • Laura Serlenga

    (Dipartimento di Scienze Economiche e Metodi Matematici, Università di Bari)

Abstract

We show that, when measuring inequality of opportunity with survey data, scholars incur two types of biases. A well-known downward-bias, due to partial observability of circumstances that affect individual outcome, and an upward bias, which depends on the econometric method used and the quality of the available data. We suggest a simple criterion to balance between the two sources of bias based on cross validation. An empirical application, based on 26 European countries, shows the usefulness of our method.

Suggested Citation

  • Paolo Brunori & Vito Peragine & Laura Serlenga, 2016. "Upward and downward bias when measuring inequality of opportunity," Working Papers 406, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2016-406
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    Cited by:

    1. Paul Hufe & Andreas Peichl, 2020. "Beyond Equal Rights: Equality of Opportunity in Political Participation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 477-511, September.
    2. Juan C. Palomino & Gustavo A. Marrero & Juan G. Rodríguez, 2019. "Channels of Inequality of Opportunity: The Role of Education and Occupation in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(3), pages 1045-1074, June.
    3. Domenico Moramarco & Bram De Rock, 2022. "Nonparametric analysis of heterogeneous multidimensional fairness," Working Papers 621, ECINEQ, Society for the Study of Economic Inequality.
    4. Aizawa, Toshiaki, 2021. "Inequality of opportunity in infant mortality in South Asia: A decomposition analysis of survival data," Economics & Human Biology, Elsevier, vol. 43(C).
    5. Brunori, Paolo & Ferreira, Francisco H. G. & Peragine, Vito, 2021. "Prioritarianism and equality of opportunity," LSE Research Online Documents on Economics 108868, London School of Economics and Political Science, LSE Library.
    6. Paolo Brunori & Guido Neidhöfer, 2021. "The Evolution of Inequality of Opportunity in Germany: A Machine Learning Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(4), pages 900-927, December.
    7. Ibragimova, Zulfiya & Frants, Marina, 2021. "Measuring income opportunity inequality: A structural review and meta-analysis," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 61, pages 89-109.
    8. Yang, Xiuna & Gustafsson, Björn & Sicular, Terry, 2021. "Inequality of opportunity in household income, China 2002–2018," China Economic Review, Elsevier, vol. 69(C).
    9. Xavier Ramos & Dirk Van de gaer, 2021. "Is Inequality of Opportunity Robust to the Measurement Approach?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 18-36, March.
    10. 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.
    11. Leonardo Gasparini & Irene Brambilla & Andrés César & Guillermo Falcone & Carlo Lombardo, 2020. "The Risk of Automation in Argentina," CEDLAS, Working Papers 0260, CEDLAS, Universidad Nacional de La Plata.
    12. Pedro Salas-Rojo & Juan Gabriel Rodríguez, 2022. "Inheritances and wealth inequality: a machine learning approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 27-51, March.
    13. Toshiaki Aizawa, 2020. "Trajectory of inequality of opportunity in child height growth: Evidence from the Young Lives study," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 42(7), pages 165-202.
    14. Vincenzo Carrieri & Apostolos Davillas & Andrew M. Jones, 2020. "A latent class approach to inequity in health using biomarker data," Health Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 808-826, July.
    15. Brunori, Paolo & Davillas, Apostolos & Jones, Andrew M. & Scarchilli, Giovanna, 2022. "Model-based Recursive Partitioning to Estimate Unfair Health Inequalities in the United Kingdom Household Longitudinal Study," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 543-565.
    16. Monroy-Gómez-Franco, Luis & Vélez-Grajales, Roberto & Yalonetzky, Gastón, 2021. "Layers of inequality: Unequal opportunities and skin colour in Mexico," MPRA Paper 106605, University Library of Munich, Germany.
    17. Dai, Xinchen & Li, Jing, 2021. "Inequality of opportunity in China: Evidence from pseudo panel data," China Economic Review, Elsevier, vol. 68(C).
    18. Hugo del Valle-Inclán Cruces, 2019. "Estimating Inequality of Opportunity in More Periods Than Ever Before: The Capital Income Approach," LIS Working papers 764, LIS Cross-National Data Center in Luxembourg.
    19. Leopoldo Cabrera & Gustavo A. Marrero & Juan Gabriel Rodríguez & Pedro Salas-Rojo, 2021. "Inequality of Opportunity in Spain: New Insights from New Data," Hacienda Pública Española / Review of Public Economics, IEF, vol. 237(2), pages 153-185, June.
    20. Elodie Douarin & Tomasz Mickiewicz, 2022. "Is the post-communist transition over?," IZA World of Labor, Institute of Labor Economics (IZA), pages 494-494, June.
    21. Paolo Brunori & Alain Trannoy & Caterina Francesca Guidi, 2021. "Ranking populations in terms of inequality of health opportunity: A flexible latent type approach," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 358-383, February.
    22. Brunori, Paolo & Hufe, Paul & Mahler, Daniel Gerszon, 2021. "The Roots of Inequality: Estimating Inequality of Opportunity from Regression Trees and Forests," IZA Discussion Papers 14689, Institute of Labor Economics (IZA).
    23. Seungwoo Han, 2022. "Identifying the roots of inequality of opportunity in South Korea by application of algorithmic approaches," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-10, December.
    24. Rafael Carranza, 2020. "Upper and lower bound estimates of inequality of opportunity: A cross-national comparison for Europe," Working Papers 511, ECINEQ, Society for the Study of Economic Inequality.
    25. Yuzhakov, Vladimir (Южаков, Владимир) & Dobrolyubova, Elena (Добролюбова, Елена) & Alexandrov, Oleg (Александров, Олег) & Klochkova, E (Клочкова, Е.), 2015. "Improving the Efficiency of the Public Service and Optimization of the Number of its Personnel Structure [Повышение Эффективности Государственной Службы И Оптимизация Численности Ее Кадрового Соста," Published Papers mn36, Russian Presidential Academy of National Economy and Public Administration.

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    More about this item

    Keywords

    inequality of opportunity; model selection; variance-bias trade-off.;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D3 - Microeconomics - - Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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