Consider a 12-person economy where the individuals are employed equally across the sectors. If the modern urban wage = 8, the informal urban wage = 3, and the tradition rural income = 1 :

1) what is the squared poverty gap index (P2) given that the poverty line = 1.25?

2) Suppose that rural income now rises to 2, other things being equal, how would you characterise and show this type of growth?

Answer rating: 100% (QA)

Answer 1 The squared poverty gap index P2 is calculated as follows P2 1N yi z2 where yi is the income of individual i z is the poverty line and N is t... View the full answer