A
An index wherein the value increases in income for all individuals but assigns a higher weight to income gains by lower-income individuals than to gains by higher-income individuals. (FULL NAME)
The Ahluwalia-Chenery Welfare Index
This principle means that if you add income to someone below the poverty line, all other incomes held constant, poverty can be no greater than it was before the income was added
Monotonicity
What do you call the ratio of the number of individuals under the poverty line to the total number of people in the population?
Headcount Index
When will the FGT Index violate the desirable criteria for poverty measures?
When alpha = 0 OR when H = N
What is the value of the Gini coefficient to show PERFECT INEQUALITY
1
Draw the Lorenz Curve that shows PERFECT INEQUALITY.
See drawing.
In Table 5.1, compute for the Kuznets Ratio
3.64
What measures the degree of income inequality among the poor?
Gini coefficient among those who are poor, Gp, or, alternatively, the coefficient of variation (CV) of incomes among the poor, CVp
In Table 5.1, compute for the income share of the top 2 richest deciles.
51%
What measure gives the average amount by which the income of a poor person falls below the poverty line
Average Income Shortfall
What measure gives us the average amount that each individual (poor or not) in the population must contribute to eradicate poverty?
Average Poverty Gap
What are the four desirable criteria for poverty measures? (All or Nothing)
•Anonymity
•Population independence
•Monotonicity
•Distributional sensitivity
In Figure 5.5, which country needs more money to reduce poverty to zero?
Country A
Who is the Nobel laureate who devised a measure for the degree of inequality between high and low income groups? (FULL NAME)
Simon Kuznets
What does P2 FGT Index capture that P1 FGT Index cannot?
In Table 5.1, compute for the income share of the top 2 poorest quintiles
14%
Measures the total amount of income necessary to raise everyone who is below the poverty line up to that line.
Total Poverty Gap
What is the value of the Gini coefficient to show that there is PERFECT EQUALITY.
0
(THRICE THE POINTS) Assume that the poverty line is 1. Assume we have 6 individuals in the economy and this is their incomes: (0.2, 0.5, 0.5, 2, 2, 2). Find the P2 level of the FGT Index.
6.25
In the Lorenz Curve graph, what represents the x-axis?
Percentage of Population
In Table 5.1, compute for the income share of the poorest 30%
8.9%
The size of the average poverty gap in relation to the poverty line
Normalized Poverty Gap (NPG)
An index that satisfies the four desirable criteria for poverty measures (FULL NAME)
FOSTER-GREER-THORBECKE Index
This principle states that, other things being equal, if you transfer income from a poor person to a richer person, the resulting economy should be deemed strictly poorer
Distributional Sensitivity Principle
Draw the Lorenz Curve that shows PERFECT EQUALITY
See drawing