Consider the following two countries (A and B). There are 10 people living in each country. Daily income  in each country for each individual (in $) is given in Table 1. Suppose the poverty line is $2 a day.  

 

2-1. Compute the head-count index for each country. 

2-2. Calculate the poverty gap in each country. 

2-3. Using the Foster-Greer-Thobecke measure, calculate the measure with ???? = 2.  

2-4. Discuss differences between the results you obtained for questions 2-1, 2-2, and 2-3. Why do  you observe these differences, and how do we interpret these results? 

r Country 1 A B 1.5 4 45 3 16 2.2 Table 1. Income for each individual 22 1.8 35 1 0.8 0.5 1.2 13 1.2 4 23 2.5 10 1.3 1.1 T