Exercise 8.43
Find the impact on national poverty of a predicted increase of 3% in the expenditures EXPEQ of those within ZONE=1. Compare your results to those obtained for ZONE=2. Do this for FGT indices with a=0, 1 and 2..

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

 

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

 

RECALL

STEP 2: Use the DAD Application: POVERTY|INCOME COMPONENT PROPORTIONAL GROWTH

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

RESULTS

Income-Component Proportional Growth (Poverty)

Session Date Wed Aug 25 11:24:00 EDT 2004
Execution Time 0.0 sec
FileName ESPMEN.daf
OBS 2000
Weight variable SIZE
Group variable ZONE
Group Number 1
Total Income EXPEQ
Income Component EXPEQ
Option Change per 100% of component
Parameter Poverty line=60000.0
Estimate -6507.69154351

 

  • Hence the total impact on poverty within group =-6507.69*3/100=-195.230

  • Because of the additivity of the FGT Index the total impact on national poverty is:

National impact=proportion of the group * Group impact within group

 

Parameter

 ZONE 1 ZONE 2
a=0 -8.08819E-05 -0.001752595
a=1 -105.4021827 -227.8190311
a=2 -10339625.99 -15443672.45