# a2 - 1 (a) HC where p = 322 HCR where p = 322 HC where p =...

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1993 1998 2004 1 (a) HC where p = 322 446 494 411 HCR where p = 322 51.50% 57.16% 47.46% HC where p = 100 24 75 81 HCR where p = 100 2.77% 8.67% 9.36% (b) 1993 1998 2004 HCR 51.50% 57.16% 57.16% © IGR 37.86% 44.86% 45.63% (FGT-2) 9.44% 14.29% 12.39% (d) 1993 1998 2004 Richest 20% 184035 188378 256241 2 (a) Poorest 40% 60394 74393 112726 PKR 3.05 2.53 2.27 The dollar-a day poverty line shows a much lower percentage of the population living in poverty. The HCR calculated using the dollar-a-day poverty line also shows a slight increase in inequality from 1998 to 2004, where the HCR calculated using the per-capita expenditure value shows a decrease in poverty levels. These differences stem from the fact that the dollar-a-day poverty line is based on the theory of purchasing power parity. PPP says that real prices of goods across countries should be equal, but in the real world there are numerous reasons for goods to have different prices in different countries. I believe that a poverty line based on per-capita expenditure for a country gives a more accurate estimate of who is poor and who is not. The headcount ratio is used to measure the percentage that fall below this poverty line, therefore it is critical that an accurate poverty line is used when calculating a HCR. The trend in South Africa seems to be that inequality is getting worse. The HCR and IGR increased from 1993 to 1998 and from 1998 to 2004. This means that the number of individuals below the poverty line increased and the income gap between the rich and the poor increased. In other words not only did the rich get richer and the poor got poorer, but the amount that the rich "got richer" exceeded the amount that the poor "got poorer". However these two measures are not transfer sensitive and may have overlooked a situation in which inequality actually got worse. The FGT values decreased from 1998 to 2004. This evidence may suggest that a transfer between subgroups of individuals under the poverty line may have contributed to a fall in inequality. From 1993 to 2004 the poorest 40% of the population grew at a much faster rate than the richest 20%. This increase in inequality is represented by the decline in the pseudo-Kuznets ratio over the time periods. The decline in the PKR as well as the HCR and the IGR suggest increased inequality from 1993 to 2004.

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PCEXP93 PCEXP98 PCEXP04 poor93 poor98 poor04 chroPoor IGR Chro P 374.98 798.2 693.83 0 0 0 0 0 798.57 303.43 207.25 0 1 1 0 0 690.62 237.36 816.81 0 1 0 0 0 511.86 317.78 615.78 0 1 0 0 0 243.89 96.45 1062.76 1 1 0 0 0 241.71 146.96 330.95 1 1 0 0 0 330.65 315.3 244.64 0 1 1 0 0 330.65 315.3 804.48 0 1 0 0 0 467.33 257.59 1012.32 0 1 0 0 0 1244.4 1736.6 3018.02 0 0 0 0 0 2737.52 3910.3 10479.06 0 0 0 0 0 9781.79 6951.95 10039.93 0 0 0 0 0 2579.39 2752.73 2721.92 0 0 0 0 0 1593.07 1457.99 2518.65 0 0 0 0 0 1938.63 2746.87 2451.97 0 0 0 0 0 1784.47 1114.17 1882.04 0 0 0 0 0 982.21 1779.08 2868.93 0 0 0 0 0 2662.84 2737.68 3066.11 0 0 0 0 0 2500.6 3729.61 7241.28 0 0 0 0 0 1462.21 1874.23 2043.43 0 0 0 0 0 1007.77 1604.7 6698.41 0 0 0 0 0 2374.98 2033.21 3705.97 0 0 0 0 0 1805.54 3517.01 2032.6 0 0 0 0 0 777.68 964.79 1462.65 0 0 0 0 0 769.9 1035.62 3691.35
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## This note was uploaded on 04/02/2008 for the course AAE 474 taught by Professor Rekasundaram-stukel during the Spring '07 term at University of Wisconsin Colleges Online.

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a2 - 1 (a) HC where p = 322 HCR where p = 322 HC where p =...

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