Inequality of opportunity under current China's license plate policy

TL;DR

This paper uses vehicle license plate data from Chinese cities to measure inequality of opportunity, revealing that technology adoption reduces inequality and advocating for random lottery systems as fair resource allocation methods.

Contribution

It introduces a novel opportunity Gini coefficient based on lucky numbers and demonstrates its effectiveness in assessing opportunity inequality in China.

Findings

Higher income correlates with greater opportunity inequality.

Adoption of new energy vehicles reduces opportunity inequality.

Random lottery allocation enhances fairness in vehicle resource distribution.

Abstract

Measuring inequality of opportunities has long been a challenging and open problem, primarily due to the limitations associated with individual-level data. In this study, we utilize data obtained from vehicle license plates in a comprehensive survey (17258 vehicles from 6 major cities in China) to evaluate the inequality of opportunities in the country. In our context, we define inequality of opportunity as the scenario where relatively expensive vehicles have a higher likelihood of being paired with license plates featuring 'Lucky Numbers'. To quantify this, we propose a lucky-number-based opportunity Gini coefficient. Through the calculation of the opportunity Gini coefficient, we observe a significant and positive correlation between opportunity inequality and income inequality. Particularly noteworthy is our finding that the advancement of technology, exemplified by the widespread adoption of new energy vehicles, can substantially reduce the inequality of opportunity. Taking incorporation of a random lottery process before acquiring a motor vehicle in Beijing and Shanghai as a natural experiment, our empirical results support the argument that, in terms of equality, employing random drawing is a fair and equitable approach for allocating scarce resources.