Suppose that at date 1 the distribution of income is (1, 2, 3), while later, at date 2, it is found to be (2, 3, 4). Ver
Posted: Sun May 29, 2022 7:26 pm
Suppose that at date 1 the distribution of income is (1, 2, 3),
while later, at date 2, it is found to be (2, 3, 4). Verify for
yourself that for a poverty line of 2 the reduction in the
headcount index of poverty is entirely due to growth in the mean,
i.e., that the redistribution component is zero. Now suppose the
distribution at date 2 is (1.5, 1.5, 3) (as in question 1). Is the
change in poverty now due entirely to redistribution? Discuss how
would your answer depends on what measure of poverty you use.
while later, at date 2, it is found to be (2, 3, 4). Verify for
yourself that for a poverty line of 2 the reduction in the
headcount index of poverty is entirely due to growth in the mean,
i.e., that the redistribution component is zero. Now suppose the
distribution at date 2 is (1.5, 1.5, 3) (as in question 1). Is the
change in poverty now due entirely to redistribution? Discuss how
would your answer depends on what measure of poverty you use.