Household ID A B C D E F G H I J Total Formula FGT Index Household income yi 250 320 330 450 470 530 800 880 900 1200 6130 Po=? Po=? Poverty gap (z-yi) ? ? ? ? ? ? ? ? ? ? ? P₁=? P₁=? Squared poverty gap (z-y:)² ? ? ? ? ? ? ? ? ? ? ? P₂=? P₂=? Cumulative income 250 570 900 1350 1820 2350 3150 4030 4930 6130 Cumulative % of households 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter18: Income Distribution And Poverty
Section: Chapter Questions
Problem 4QFR
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Country A has a poverty line of 560 in their currency (i.e., z=560). Calculate the Foster-Greer-Thorbecke (FGT) indices (i.e., P0, P1, P2) by completing the table attached to this question.

Household ID
A
BCDEF
G
H
I
Total
Formula
FGT Index
Household
income yi
250
320
330
450
470
530
800
880
900
1200
6130
Po=?
Po=?
Poverty gap
(z-yi)
?
?
?
?
?
?
?
?
?
?
?
P₁=?
P₁=?
Squared
poverty gap
(z-yi)²
?
?
?
?
?
?
?
?
?
?
?
P₂=?
P₂=?
Cumulative
income
250
570
900
1350
1820
2350
3150
4030
4930
6130
Cumulative %
of households
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Transcribed Image Text:Household ID A BCDEF G H I Total Formula FGT Index Household income yi 250 320 330 450 470 530 800 880 900 1200 6130 Po=? Po=? Poverty gap (z-yi) ? ? ? ? ? ? ? ? ? ? ? P₁=? P₁=? Squared poverty gap (z-yi)² ? ? ? ? ? ? ? ? ? ? ? P₂=? P₂=? Cumulative income 250 570 900 1350 1820 2350 3150 4030 4930 6130 Cumulative % of households 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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