Human Opportunity Index of the World Bank

In 2010, the World Bank released a report on the Human Opportunity Index (HOI) for Latin American and Caribbean countries. The HOI is different from measures of poverty in that it does not measure deprivation of a commodity by people in a community; instead, it measures the level of access of a certain basic service by the members in a community.

Some basic services that we believe should be available to all are (but not exhaustive) are: (i) access to primary and secondary education; (ii) access to healthcare; (iii) access to clean water; (iv) access to public transportation; and (v) access to government offices. However, it may be that some of these services are not available to all the members of a region or a country, mainly because of certain individual or regional characteristics. For example, in some countries, females are not allowed to go to schools by their families even though the government may encourage universal education because the school is too far away from home, or for other reasons. Thus, the HOI measures the level of access of a basic service (access to education in this case) available to all the children in a region or a county.

The HOI is measured in the following way:

Suppose there are N children in a country. Suppose that a proportion of p of children in a country have access to a basic service, like primary education. These children have different characteristics, based on their gender, region of residence, whether the head is male of female, or wealth of household. Therefore, a male child of a poor family headed by a female in region x will have a different level of access to education than a female child of a rich family living in region y. If there are 2 genders, R regions in a country, male or female head of a family, and 3 different wealth levels (rich, middle class, poor), then there will be a total of 2 x R x 2 x 3 = 12R different characteristics. Let x = {1, 2, ..... 12R} denote each of the characteristics. More characteristics can be added to the mix if needed.

Across the country, as said before, suppose p is the proportion of children who have access to education. Let p(x) be the probability that children with characteristics x  have access to that service. If p(x)<p then that group is disadvantaged, because they are worse than the average of the nation, and if p(x)>p then the group is advantaged because it have more access than the average population. If V is the disadvantaged group, then the Human Opportunity Index is:

HOI = p - E(p - p(x) | x is in V)    

The term E(p - p(x) | x is in V) is computed as follows: it is the average of the difference of p and p(x) of all the characteristics that are disadvantaged. This value is then subtracted from p to calculate the HOI.    

HOI is a number between 0 and 1. The closer it is to 1 the more there is access of a basic service by all who deserve it. HOI can be calculated of each of the basic service that is available to the citizens of a country. If the HOI of a service is low, governments should work to improve the access of that service, and not just provide it.