Exercise 10.3

When sample observations represent households, three size variables can be used in combination with the variable of interest EXPEQ:

  1. 1 for all households

  2. The number of persons in the household (SIZE)

  3. The number of adult equivalents in the household (EQUI)

Compute the FGT index for a = 0,1 for every one of these three alternative definitions of the size variable and explain the difference.

Answer
STEP 1: Initialising  the sampling weight: EDIT|Set Sample Design

  • After choosing the appropriate variable(s), click on  the button OK.

STEP 2: Use the DAD Application: POVERTY|FGT INDEX

 

  • After choosing the appropriate variable(s) and parameters, click on the COMPUTE button.

 

RESULTS

 

FGT (Poverty)

Session Date Tue Sep 14 13:45:25 EDT 2004
Execution Time 0.0 sec
FileName SENEGAL_95.daf
OBS 2447
Sampling Weight WEIGHT
Variable of interest EXPEQ
Size variable Without size
Group variable No Selection
Group Number 1
Option Normalised = YES
Parameter α=0

Index

Estimated value

Standard deviation

Lower bound

Upper bound

Confidence Level in (%)

FGT

0.62478000

0.01641005

0.59261689

0.65694311

95.00000000

Poverty line

140000.00000000

0.00000000

140000.00000000

140000.00000000

95.00000000

EDE

0.00000000

0.00000000

0.00000000

0.00000000

95.00000000

 
  Headcount Poverty gap
Without size 0.6248 0.2374
SIZE 0.6677 0.2613
EQUI 0.6652 0.2598