Brazilian Review of Econometrics, Vol 30, No 2 (2010)

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Measuring Progress Toward Basic Opportunities for All

Ricardo Paes de Barros, José R. Molinas Vega, Jaime Saavedra

Abstract


Universal access to basic opportunities is undoubtedly a central objective of development. In this study, we propose an alternative scalar measure. In addition to being sensitive to the number of available opportunities, this new measure is also concerned with how these opportunities are allocated, and is therefore known as an equity sensitive coverage rate. The proposed measure is increasing in the overall coverage rate and decreasing in deviations from the ideal of equal opportunity. It is obtained by deducting a penalty equal to the deviation from the ideal of equal opportunity from the overall coverage rate. We show that this equity sensitive measure has several suitable properties. In particular, we demonstrate that it is consistent with both rst- and second-order  stochastic dominance. As a consequence, this measure is Pareto-consistent and sensitive to improvements in the allocation of the available opportunities. According to this index, any increase in thenumber of opportunities that also leads to an increase in the average coverage rate among the most vulnerable groups would always represent a progress towards opportunities for all. In addition, we propose an estimation procedure for the index and its variance.


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