APPENDIX 3: Exercises
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commands that can be used within Stata once DASP has been downloaded; the first measures the headcount index, producing the standard error of the estimate of the poverty rate, and lower and upper bounds of a 95 percent confidence interval, while the second computes the Gini index of inequality, again with a standard error and confidence interval. Command ifgt pcexp, alpha(0) pline(3000) Output Poverty index : FGT index Sampling weight : weighti Parameter alpha : 0.00 ---------------------------------------------------------------------------Variable | Estimate STD LB UB Pov. line ----------+---------------------------------------------------------------pcexp | 0.037168 0.011489 0.014597 0.059739 3000.00 --------------------------------------------------------------------Command igini pcexp Output Index : Gini index Sampling weight : weighti --------------------------------------------------------------------Variable | Estimate STD LB UB ------------------+------------------------------------------------1: GINI_pcexp | 0.266652 0.015956 0.235305 0.297999 --------------------------------------------------------------------Now we are ready to turn to the measurement of poverty using the data from the Bangladesh Household and Expenditure Survey 1991/92. 1. Compute the five main measures of poverty (headcount, poverty gap, squared poverty gap, Sen index, and Sen-Shorrocks-Thon index) for per capita expenditure, using both the food poverty line and the total poverty line derived by the cost of basic needs method in the previous exercise.
Headcount index Poverty gap index Squared poverty gap index Sen index Sen-Shorrocks-Thon index
Food poverty line ________ ________ ________ ________ ________
Total poverty line ________ ________ ________ ________ ________
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