ECOn 361 Asign 1 - ECON 361 Assignment 1 Instructor Barber Queen\u2019s University Department of Economics Due Feb 27th 2019 NOTE You may work in

ECOn 361 Asign 1 - ECON 361 Assignment 1 Instructor...

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ECON 361 Assignment 1 Instructor: Barber Queen’s University, Department of Economics Due: Feb 27th, 2019 NOTE: You may work in groups of up to 3, but not more than 3. (submit just one copy). Please show all of your work, failure to show your work will results in a score of 0. 1. Poverty Measures: (a) Consider a distribution of income over a sample of 10 people: 5,000, 19,000, 45,000, 81,000, 10,000, 35,000, 115,000, 43,000, 37,000, 28,000. Let the poverty line be 21,000. Calculate the following (3 Marks): i. Headcount index. ii. Poverty gap index. iii. Squared poverty gap index. (b) Consider a transfer of 5,000 from the person whose income is 19,000 to the person whose income is 10,000. How would each of the following indices respond? (4 marks) i. Headcount index. ii. Poverty gap index. iii. Squared poverty gap index. What, if any, poverty measurement axioms are violated in this example and by which indices? (c) Next imagine that 10 new people are added to our sample (from part (a)) who end up having the exact same distribution of income as the first 10. i.e. we now have two people with 15,000, two with 20,000, etc.Again, re-calculate the following: (4 marks) i. Headcount index dfs.

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