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The roots of inequality : estimating inequality of opportunity from regression trees

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  • Brunori,Paolo
  • Hufe,Paul
  • Mahler,Daniel Gerszon

Abstract

This paper proposes a set of new methods to estimate inequality of opportunity based on conditional inference regression trees. It illustrates how these methods represent a substantial improvement over existing empirical approaches to measure inequality of opportunity. First, the new methods minimize the risk of arbitrary and ad hoc model selection. Second, they provide a standardized way to trade off upward and downward biases in inequality of opportunity estimations. Finally, regression trees can be graphically represented; their structure is immediate to read and easy to understand. This will make the measurement of inequality of opportunity more easily comprehensible to a large audience. These advantages are illustrated by an empirical application based on the 2011 wave of the European Union Statistics on Income and Living Conditions.

Suggested Citation

  • Brunori,Paolo & Hufe,Paul & Mahler,Daniel Gerszon, 2018. "The roots of inequality : estimating inequality of opportunity from regression trees," Policy Research Working Paper Series 8349, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8349
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Cowell, Frank A & Victoria-Feser, Maria-Pia, 1996. "Robustness Properties of Inequality Measures," Econometrica, Econometric Society, vol. 64(1), pages 77-101, January.
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    5. Alain Trannoy & Sandy Tubeuf & Florence Jusot & Marion Devaux, 2010. "Inequality of opportunities in health in France: a first pass," Health Economics, John Wiley & Sons, Ltd., vol. 19(8), pages 921-938, August.
    6. Jorge Luis García & James J. Heckman & Anna L. Ziff, 2017. "Gender Differences in the Benefits of an Influential Early Childhood Program," NBER Working Papers 23412, National Bureau of Economic Research, Inc.
    7. Lefranc, Arnaud & Pistolesi, Nicolas & Trannoy, Alain, 2009. "Equality of opportunity and luck: Definitions and testable conditions, with an application to income in France," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1189-1207, December.
    8. Veruska Oppedisano & Gilberto Turati, 2015. "What are the causes of educational inequality and of its evolution over time in Europe? Evidence from PISA," Education Economics, Taylor & Francis Journals, vol. 23(1), pages 3-24, February.
    9. 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.
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    11. 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.
    12. Nicolas Pistolesi, 2009. "Inequality of opportunity in the land of opportunities, 1968–2001," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(4), pages 411-433, December.
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    15. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
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    17. Paul Hufe & Andreas Peichl & John Roemer & Martin Ungerer, 2017. "Inequality of income acquisition: the role of childhood circumstances," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 499-544, December.
    18. 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.
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    1. repec:ces:ifosdt:v:71:y:2018:i:05:p:18-22 is not listed on IDEAS
    2. repec:ces:ifosdt:v:71:y:2018:i:20:p:20-28 is not listed on IDEAS

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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