Paolo Brunori

Opportunity-Sensitive Poverty Measurement

This paper offers an axiomatic characterization of two classes of poverty measures that are sensitive to inequality of opportunity, one a strict subset of the other. The proposed indices are sensitive not only to income shortfalls from the poverty line, but also to differences in the opportunities faced by people with different predetermined characteristics, such as race or family background. Dominance conditions are established for each class of measures and a sub-family of scalar indices, based on a rank-dependent aggregation of type-specific poverty levels, is also introduced. In empirical analysis using household survey data from eighteen European countries in 2005, substantial differences in country rankings based on standard Foster-Greer-Thorbecke indices and on the new opportunity-sensitive indices are found. Cross-country differences in opportunity-sensitive poverty are decomposed into a level effect, a distribution effect, and a population composition effect.

The perception of inequality of opportunity in Europe

Does the way scholars measure inequality of opportunity correspond to how people perceive it? What other factors influence individual perception of this phenomenon? To answer these questions we must first clarify how scholars define and measure inequality of opportunity. We discuss the possible mechanisms linking objective measures to subjective perception of the phenomenon, then propose a measure of perceived inequality of opportunity, and finally test our hypothesis by merging data coming from two sources: the European Union Statistics on Income and Living Conditions (2011) and the International Social Survey Programme (2009). We suggest that the prevailing perception of the degree of unequal opportunity in a large sample of respondents is only weakly correlated with its objective measure. We estimate a multilevel model considering both individual and country level controls to explain individual perception of unequal opportunity. Our estimates suggest that the two most adopted measures of inequality of opportunity have not clear role in explaining its perception. Conversely, other country level variables and personal experiences of intergenerational social mobility are important determinants of how inequality of opportunity is perceived.

Chapter 1 Compensation, Reward, and the Measurement of Unfair Inequalities

Purpose – In this chapter we discuss to what extent some of the measures of inequality of opportunity (IOp hereafter) proposed in the literature meet the reward and the compensation principles. Methodology – We study the direct unfairness and fairness gap measures proposed by Fleurbaey and Schokkaert (2009) and the ex ante and the ex post measures proposed by Checchi and Peragine (2010). As all the measures violate at least one of the principles, we propose a framework in order to quantify, for each solution, the violations of the property that it does not fully satisfy and we formulate the problem of choosing the measure that minimizes the violations of the principle not fully satisfied. Findings – This procedure is shown to be able to rationalize some of the existing measures of opportunity inequality and to obtain new measures of IOp.

Upward and Downward Bias When Measuring Inequality of Opportunity

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.

Inequality of Opportunity in Sub-Saharan Africa ⇤

In the last decades, inequality of opportunity has been extensively studied by economists on the assumption that, in addition to being normatively undesirable, it can be related to low potential for growth. This paper evaluates inequality of opportunity and the different sources of unequal opportunities in 11 Sub-Saharan Africa countries. The results indicate that the portion of total inequality that can be attributed to exogenous circumstances -- that is, circumstances outside the control of individuals control -- is between 30 percent and 40 percent in the countries considered. The results also indicate a positive association between total consumption inequality and inequality of opportunity. Finally, this paper addresses a number of methodological issues that typically arise when measuring inequality of opportunity with imperfect data, which is the typical case in developing countries.

Income Taxation and Equity: New Dominance Criteria and an Application to Romania

This paper addresses the problem of the normative evaluation of income tax systems and income tax reforms. While most of the existing criteria, framed in the utilitarian tradition, are uniquely based on information about individual incomes, this paper, building upon the opportunity egalitarian theory, proposes new equity criteria which take into account also the socio-economic characteristics of individuals. Suitable dominance conditions that can be used to rank alternative tax systems are derived by means of an axiomatic approach. Moreover, the theoretical results are used to assess the redistributive effects of an hypothetical tax reform in Romania through a microsimulation analysis.