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Unformatted text preview: an underestimate of the true necessary growth rate of income. 4. Including inequality ( σ it ) as an explanatory variable in regression model (1) results in the following equation. ln P it = θ i + η ln μ it + β ln σ it + ε it (2) where σ it ≡ standard deviation of the income distribution. Does redistribution help reach the MDG poverty goal? Based on B&B(2003)’s estimate of β , calculate by how much does a one standard deviation reduction in income inequality ( σ it ) reduces poverty and how large the change in inequality would have to be to achieve the MDG poverty goal. 5. Exercises #4, 6, 7(a), 8, 9 & 10 in Chapter 3, D. Ray. Development Economics ....
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This note was uploaded on 10/16/2009 for the course ECON ECO324 taught by Professor Gustavoj.bobonis during the Fall '09 term at University of Toronto Toronto.
 Fall '09
 GustavoJ.Bobonis

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