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POVERTY REDUCTION STRATEGY TN

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where<br />

y<br />

y<br />

= y for y < z (i 1, ..., m) and<br />

*<br />

i i i<br />

=<br />

= z for y<br />

> z<br />

(i = m<br />

*<br />

i i<br />

+<br />

1, ..., n)<br />

µ* is the mean income of the censored distribution.<br />

Takayama’s measure incorporates information about the non-poor also, except<br />

that it is defined over a censored distribution of income: y * i<br />

instead of the actual<br />

distribution y i .<br />

v. FGT Index<br />

One of the poverty measures, which has gained considerable popularity in recent years,<br />

proposed by Foster, Greer and Thorbecke (1984) is defined as follows:<br />

P ( α)<br />

=<br />

1<br />

n<br />

m<br />

⎛ z − y<br />

Σ ⎜<br />

⎝ z<br />

i=<br />

1<br />

i<br />

α<br />

⎞<br />

⎟<br />

⎠<br />

If α = 0, P (0) = n<br />

m , i.e., the head count ratio.<br />

(7)<br />

If 0 = 1, P (1) = H. (z - µp)<br />

A popular form in which P (α) class of measures is often used is<br />

1<br />

m<br />

P (2) = Σ [( z − y ) ] 2<br />

i<br />

/ z<br />

n i=<br />

1<br />

(8)<br />

As the value of α is increased, greater and greater weight is attached to the<br />

shortfall of income from the poverty line.<br />

240

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