Exercise 8.42
Find the impact on poverty of those within ZONE=1 of a predicted increase of 3% in expenditures EXPEQ.

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 is -6507.69*3/100=-195.230

  • To check the validity of this theoretical approach, we can simulate the increase by multiplying EXPEQ by 1.03 and computing the difference in FGT(alpha=1,z=60000)|ZONE=1.

  • The difference in FGT is then -194.96875000