Question

The results below are the estimated FGT poverty measure for a community in 2019; Head Count Index (HCI) = 78 Aggregate Poverty Gap = 26.47 Poverty Gap Index = 0.43 Aggregate Squared Poverty Gap = 13.66 Squared Poverty Gap Index = 0.22 Assume that the total population of the community is 200 and the poverty line of the community is GH¢400, interpret; the Head Count Index the Poverty Gap Index the Squared Poverty Gap Index c) Discuss two (2) main defects of this FGT measure of poverty

Answer 1

1)

Head count lndex = 78

This means that , there are 78 persons lying below the poverty line. Among the population of 200, the number of people who doesnt have GH¢ 400 is 78.

Aggregate poverty gap= 26.47

It's the sum of distance between those who are poor and the specified 400 GH¢.

Poverty gap lndex =0.43

It indicates the depth of poverty . lt shows that, poor are far from acquiring the specified 400 GH¢ . ( The distance by which poor people fall from poverty line are added.lt is 43 percent of the poverty line.)

*Squared poverty gap = 13.66

It shows the severity of poverty. It is acquired by adding the squares of the distance by which poor fall from poverty line. Value of 13.66 indicates that , percent of very poor people is high.

* Squared poverty gap lndex =0.22

It measures the degree of of poverty for the given Area. The average of the square of poverty gap ratio is 0.22 .More weight is given to how far income of poor falls below poverty line.

2) Main defects of Foster -Greer-Thorbecke measures are as follows

* poverty is a multi- dimensional phenomenon. FGT measures analyze it only from a unidimensional perspective ( specified poverty line.)

*These measures doesn't reveal the prevalence and intensity of joint deprivations.