Assignment for Friday November 4.
You have been provided with the 2011 national household survey from Nepal collected by the national statistics bureau. You have been provided two files in stata format:
Poverty_student.dta - a file prepared by the Nationals Statistics that has been used to calculate poverty.
The data have been analyzed for an ADB poverty report which is provided with this assignment . Some questions ask you to confirm some of the results in the paper. Note that sometimes the results cannot be confirmed. In such cases, I have indicated the numbers that I obtained in brackets. Let me know if I got it wrong.
You need to submit a report answering the questions and include an appendix with the log file (that also reports the output) of your program you created. Please include comments in your program, so it is clear what is done where (with statements like : *This command produces the answer to question ..).
If using Stata, for the questions related to poverty (question 1-4), you cannot use user written routines, such as fgt_ci.ado. For the inequality questions you can use user written routines.
This is an individual assignment. Group submissions are allowed for a maximum of 3 group members for 1 report. If you decide to submit as a group, please indicate the authors of the report on the first page. The previous assignments to working groups is irrelevant, you can form your own groups.
Para 2: Using the national poverty line, poverty incidence has been falling at an accelerated pace from 41.8% to 30.9% between 1996 and 2004 and further to 25.2% of the overall population in 2011.
1. Confirm that the headcount ratio is 25.2 percent. (Hint: To do so, you need to account for regional price variation, and use the weights provided in the survey) (1 point)
Para 6: In 2011, poverty in the mountains was most prevalent at 42.3% (41.1%) in contrast to an average of 8.7% in the urban hills. Similarly, the mountains not only have the highest percentage of poverty on average, but it is also increasing. Poverty incidence in the mountains decreased considerably from 57.0% to 32.6% between 1996 and 2004, but has since increased to 42.3% (41.1%) in 2011. It is comparatively lower in the other ecological zones—24.3% (24.1%) in the hills and 23.4% (23.9%) in the Terai.
2. Confirm the headcount ratio in the mountains, hills and Terai in 2011. (1 point)
3. What percentage of the poor live in the mountains, hills and Terai? (1 point)
Para 7: The poverty gap index shows that on average, more Nepalese poor are closer to rising above the poverty line than they were 7 years ago. The poverty gap index measures the severity of poverty by considering how far, on average, the poor are from the poverty line. It can be interpreted as the average percentage shortfall in income of the poor, from the poverty line. Nepal’s poverty gap (as per the national poverty line) has steadily declined from 11.8% in 1996 to 7.6% in 2004 and further to 5.4% (5.5%) in 2011. Similarly, the rural poverty gap index has also been steadily declining from 12.1% in 1996 to 8.5% in 2004 and 5.9% in 2011— indicating that the average rural poor’s probability of escaping out of poverty has improved.
4. Confirm the poverty gap index in 2011. (1 points)
Para 19: Inequality in Nepal widened between 1996 and 2004, but then narrowed in 2011. The Gini coefficient, which increased from 0.34 to 0.41 between 1996 and 2004 has since declined to 0.33 in 2011. Inequality in urban Nepal is wider than inequality in the nation as a whole, even though it is akin to the national trend. Inequality in the urban area widened from 0.43 in FY1996 to 0.44 in FY2004 only to narrow to 0.35 in FY2011. Furthermore, gini coefficient estimates also measure a similar trend for rural Nepal: inequality increased from 0.31 to 0.35 and then decreased to 0.31 in FY1996, FY2004 and FY2011 respectively. Moreover, rural inequality is lower than both urban and inequality in the nation as a whole.
5. Confirm the national Gini coefficient, and the Gini coefficient for urban and rural areas in 2011. Use the same consumption welfare measure as used for the poverty statistics.(1 point)
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