Short Answer Section Income Distribution Person Income (Y_i) Income Decile 1 $10 .018 2 $20 .036 3 $30 .054 4 $40 .072 5 $50 .090 6 $60 .108 7 $75 .135 8 $80 .144 9 $90 .162 10 $100 .180 Assume that the poverty line for this local economy is $70. 1. The headcount ratio/index for this economy is? 2. The total poverty gap in this local economy is? 3. The total poverty gap index in this local economy is? 4. The severity of poverty index in this local economy is?
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The headcount ratio/index is the proportion of the population that is living in poverty. In this case, it would be the sum of the income deciles for those earning less than $70. So, the headcount ratio would be 0.018 + 0.036 + 0.054 + 0.072 + 0.090 + 0.108 = 0.378 Show more…
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Income Distribution Person Income (Yi) 1 $10 2 $20 3 $30 4 $40 5 $50 6 $60 7 $75 8 $80 9 $90 10 $100 Assume that the poverty line for this local economy is $70. 1. The headcount ratio/index for this economy is? 2. The total poverty gap in this local economy is? 3. The total poverty gap index in this local economy is? 4. The severity of poverty index in this local economy is?
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