Lower and upper bound estimates of inequality of opportunity for emerging economies

Authors: Paul Hufe, Andreas Peichl, Daniel Weishaar,
Issue: 2022
Link to Publication (External Site)

This paper demonstrates that internationally-accepted measures used to assess equality of opportunity tend to underestimate the level of inequality in emerging economies.

The authors studied countries where longitudinal panel studies were available; comparing their results with others obtained through standard measures using official data.

This allowed a comparison of income and consumption data for 12 emerging economies in Africa, Central and South America, Russia, East Asia and South-East Asia.

The results showed standard measures underestimated levels of inequality of opportunity by between 20 and 30 percentage points.

The findings are important because these measures are key tools for policymakers who must target resources to where they are most needed, the researchers suggest. The paper proposes statistical methods which could take into account this downward bias in order to adjust for it.