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A Random Forest approach of the Evolution of Inequality of Opportunity in Mexico

Author

Listed:
  • Thibaut Plassot

    (Department of Economics - Universidad Iberoamericana Mexico City)

  • Isidro Soloaga

    (Department of Economics - Universidad Iberoamericana Mexico City)

  • Pedro J. Torres L.

    (Department of Economics - Universidad Iberoamericana Mexico City)

Abstract

This work presents the trend of Inequality of Opportunity (IOp) and total inequality in wealth in Mexico for the years 2006, 2011 and 2017, and provides estimations using both an ex-ante and ex-post compensation criterion. We resort on a data-driven approach using supervised machine learning models to run regression trees and random forests that consider individuals’ circumstances and effort. We find an intensification of both total inequality and IOp between 2006 and 2011, as well as a reduction of these between 2011 and 2017, being absolute IOp slightly higher in 2017 than in 2006. From an ex-ante perspective, the share of IOp within total inequality slightly decreased although using an ex-post perspective the share remains stable across time. The most important variable in determining IOp is household´s wealth at age 14, followed by both, father´s and mother´s education. Other variables such as the ability of the parents to speak an indigenous language proved to have had a lower impact over time.

Suggested Citation

  • Thibaut Plassot & Isidro Soloaga & Pedro J. Torres L., 2022. "A Random Forest approach of the Evolution of Inequality of Opportunity in Mexico," Working Paper Series Sobre México 2022004, Sobre México. Temas en economía.
  • Handle: RePEc:smx:wpaper:2022004
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    References listed on IDEAS

    as
    1. Marc Fleurbaey & Vito Peragine, 2013. "Ex Ante Versus Ex Post Equality of Opportunity," Economica, London School of Economics and Political Science, vol. 80(317), pages 118-130, January.
    2. Maurizio Bussolo & Daniele Checchi & Vito Peragine, 2018. "The long term evolution of inequality of opportunity," LIS Working papers 730, LIS Cross-National Data Center in Luxembourg.
    3. Fleurbaey, Marc, 2012. "Fairness, Responsibility, and Welfare," OUP Catalogue, Oxford University Press, number 9780199653591, November.
    4. 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.
    5. Souza, Wallace Patrick Santos de Farias & Annegues, Ana Claudia & Rodrigues de Oliveira, Victor, 2017. "Thoughts on the inequality of opportunities: new evidence," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    6. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 429-450, December.
    7. Francisco H. G. Ferreira & Jérémie Gignoux, 2011. "The Measurement Of Inequality Of Opportunity: Theory And An Application To Latin America," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(4), pages 622-657, December.
    8. Francisco H.G. Ferreira & Jérémie Gignoux, 2011. "The Measurement of Inequality of Inequality of Opportunity: Theory and an Application to Latin America," PSE-Ecole d'économie de Paris (Postprint) halshs-00754503, HAL.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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