LAC Equity Lab: Human Opportunity Index - D-Index

An equality-of-opportunity profile can help policy makers design effective public policies for an equitable expansion of human opportunities, thus leveling the playing field for all children. The Dissimilarity Index (D-index) measures whether existing opportunities (access to services) are allocated equitably, comparing different circumstance groups’ probabilities of accessing a given opportunity. For example, the current inequality-of-opportunity profiles in LAC for education are driven mainly by parental education, while for access to water, sanitation, and electricity the profile is driven mainly by where a child lives (rural versus urban residence).

This dashboard contains the decomposition of the D-index for all opportunities. The D-index ranges from 0 to 1. A D-Index equal to 0 implies that access to an opportunity is the same among the general population no matter one’s particular situation (e.g. whether urban or rural dweller, or whether male or female, etc.). In contrast, a D-index of 1 indicates that a group is completely excluded from access. The D-index is interpreted as the share of opportunities that would have to be "reallocated" across different groups of children so that all groups would have equal access. 

A “Dissimilarity Index” measures dissimilar coverage rates across groups defined by circumstances. This index stands for the fraction of people who would need to have a good or service reassigned as a percentage of all people who have access to the good or service. Accordingly, (1 − D) would stand for the percentage of available opportunities that were properly allocated. The HOI can be shown as:

HOI = C × (1 – D)

where C is the coverage rate and D is the dissimilarity index. Hence, the HOI can be seen as the average coverage rate, discounted by one minus the inequality index D. In the case in which all possible groups have the same access the D-Index is zero and the HOI is equal to the coverage rate. In the other extreme, if one group has full access while another has no access, the D-index equals one and the HOI is zero.

Source: Molinas, J., R. Paes de Barro, J. Saavedra and M. Giugale. 2012. "Do Our Children Have a Chance?" The 2010 Human Opportunity Report for Latin America and the Caribbean. Washington, DC: World Bank.

For more information on the calculation of HOI and the D-index, click here.