Question 2 Consider an 8 person economy with the following income distribution: (.6,.6,.8,.8,2,2,6,6) The poverty line is 1 Calculate the level of poverty using P2 of the Foster-Greer-Thorbecke (FGT) Index.
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Question 2
Consider an 8 person economy with the following income distribution: (.6,.6,.8,.8,2,2,6,6)
The poverty line is 1
Calculate the level of poverty using P2 of the Foster-Greer-Thorbecke (FGT) Index.
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- Give a numerical example of how the headcount index doesn’t account for changes in the distribution below the poverty line. Assuming that the poverty line is 2, calculate the values of the index for each of the following distributions: a) (1, 2, 3) b) (1.5, 1.5, 3) c) (1, 2, 2, 3) d) (0.75, 2.5, 2.75)Consider an economy with 4000 people and the following income distribution: each person in the bottom quartile of the income distribution earns $10 dollars per hour; each person in the 2nd quartiles earns $20 dollars per hour; each person in the 3rd quartiles earns $25 dollars per hour;and each person in the top quartile of the income distribution earns $45 dollars per hour. (2) Suppose the bottom quartile pays no taxes, the 2nd quartiles pay 10% its income in taxes, the 3rd pays 20% and the top quartile pays 40% of its income in taxes. 80% of all tax money is redistributed equally to all citizens in the form of military defense, government pensions (social security), roads/highways, etc. The remaining tax money is distributed entirely to the poorest quartile. What is the Gini coefficient associated with this redistribution plan?1. Income inequality and the poverty rate The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2007, the poverty line is set at an annual income of $42,350 for an individual. Year Lowest Quintile Second Quintile 2001 2007 2013 2019 3.0 3.4 3.8 5.0 Share of Total Income in Perkopia (Percent) 8.6 9.4 9.7 11.0 The data in the table suggest that there was Middle Quintile Fourth Quintile 14.0 14.6 15.2 15.5 21.9 22.4 22.9 25.0 Highest Quintile 52.5 50.2 48.4 43.5 income inequality from 2001 to 2019. MacBook Pro Complete the following table to help you determine the poverty rate in Perkopia in 2007. To do this, begin by determining the total income of all individuals in each quintile using the fact that total annual income in the economy is $500,000,000. Next, determine the income of an…
- Consider the following distribution of income in a 12-person economy. (1.1, 1.5, 1.5, 2, 2, 2, 2, 3, 3, 3, 3). Calculate the P₂ FGT poverty measure assuming that the poverty line is 1.8 (Round to 3 decimal places)Q10. Percentage of people below poverty line is called : - a) Head Count Ratio b) Poverty incidence ratio c) Both a and b d) None of these[1] Consider an income distribution S: (10, 20, 30, 50, 100). Suppose it is divided into two groups, group A: (10, 30, 50) and group B: (20, 100). Let the poverty line be 30. (a) Show that for both Headcount and Poverty Gap, the weighted sum of poverty for group A and group B is the same as the overall poverty in S. (b) Now consider a relative poverty line which is 60 percent of the median income for each group. Will the decomposition rule still hold? Explain.
- Due to a stagnant income for 23 years, the number of Mexicans who cannot buy the basic basket has been practically the same since 1992. According to data from the National Council for the Evaluation of Social Development Policy (Coneval), in 2014, the 53.2 percent of the population had income below the welfare line, and a monthly per capita income of 3,115 pesos. In 1992, when poverty began to be measured in Mexico, it was 53.1 percent of the population, with an average income of 3,322 pesos. The basic product consumption basket is a necessary element to calculate inflation through the (INPC / GDP deflator / interest rate) _______________________________Dina and Charles are married, under the age of 65, and have two children under the age of 18. Charles works full time and earns $19,000, while Dina works part time and earns $9,000. Thus, in total, their family income is $28,000. Are Charles and Dina living in poverty? O Yes O No Suppose that Charles divorces Dina and leaves the family without paying alimony or child support. Dina must now support her two children alone, so she begins working full time and earns a total of $18,000. Are Dina and her children living in poverty? O Yes O No Again, consider Dina, a single mother with two children under 18 who earns an annual income of $18,000. Suppose that Dina qualifies for a welfare program for single mothers that provides her with $4,000 in food assistance. After receiving welfare, is Dina's family living in poverty? O Yes O NoThe income distribution for a population of 5 individuals is given as: 2,3,4,5 and 6. The poverty line is 4. The value of the Foster Greer Thorbeck measure of poverty when alpha equals 1 (that is P1) is. 0.15 0.085 0.1 O 0.12 0.075
- Question 9 In Country X there are only two income levels: $10,000 and $40,000. Twenty million individuals earn the low income and twenty million earn the high income. The Gini coefficient associated with this income distribution is given by 0.70 0.30 0.35 0.65Which one of the following is the most likely to be associated with an increase in the incidence of poverty? A) The Gini coefficient falls substantially. B) The number of single persons with children and of single pensioners has increased substantially. C) The real income of those in the top 20% of income earners falls by 10%. D) The number of people earning below the level of income support has decreased.The following table summarizes the income distribution for the town of Perkopia, which has a population of 10,000 people. Every individual within an income group earns the same income, and the total annual income in the economy is $500,000,000. Suppose that in 2010, the poverty income threshold, or poverty line, is set at an annual income of $42,350 for an individual. Year 2006 2010 2016 2020 Quintile Lowest Lowest Quintile Second Quintile 3.0 3.4 3.8 5.0 The data in the table suggest that there was Second Middle Fourth Highest Share of Total Income in Perkopia (Percent) Middle Quintile Fourth Quintile Highest Quintile 8.6 9.4 9.7 11.0 Share of Income in 2010 (Percent) 3.4 9.4 14.6 22.4 50.2 14.0 14.6 15.2 15.5 Complete the following table to help you determine the poverty line in Perkopia in 2010. To do this, begin by determining the total income of all individuals in each quintile, using the fact that total annual income in the economy is $500,000,000. Next, determine the income of…
