Question 1 [Total 10 marks] The purpose of this question is to construct a multidimensional poverty index using the data from Bangladesh for 1998, and to compare the result with a monetary index of poverty. To answer the questions, you have to use the hh.xls data. For the purposes of this exercise, there are seven dimensions of poverty, listed here along with the thresholds (i.e. the poverty lines) and weights I have explained these dimensions in the lecture. In case of uncertainty, please re-listen to the video clips. Dimension of poverty Distance to the nearest all-weather road Distance to the nearest bank Toilet facility Access to electricity Education of household head Household assets Household landholding Variable name distance d bank toilet hhelec educhead hassetg hhlandd Poor if: Distance is 3 km or more Distance is 3 km or more No modern toilet No electricity connection Less than 4 years of education Assets less than 100,000 taka Own less than 100 decimals Weight 0.125 0.125 0.125 0.125 0.25 0.125 0.125 Note: distances in the data are in km, toilet=1 for modern toilet, and 0 means no modern toilet, hhelec=1 means electricity connection, and 0 means no electricity connection, education is expressed in years, assets are expressed in taka, and landholding in decimals. a- Generate and indicator (that is variable set to 1, if the household is poor, and to 0, otherwise) for each dimension listed in the table. Label these indicators as pdistance, pbank, ptoilet, phhelec, peduchead, phhassetg, phhlandd. [1.5 marks] b- What is the percentage of households who are deprived in each of these subdimensions. [1 mark] Percentage Dimension pdistance pbank ptoilet, phhelec peduchead, phhassetg phhlandd C- Compute the deprivation score for each household (to compute deprivation score see lecture notes), call this deprivation score pdimensions. What is the maximum value of the deprivation score and what is the minimum value of the deprivation score interpret these values. [2.5 marks). d- Define a household as multidimensionally poor if it is deprived on at least half of the dimensions (i.e., the multidimensional poverty threshold of 0.5). What the multidimensional headcount poverty rate. Use the normalized score to compute your Multidimensional headcount poverty rate. [2.5 marks] e- Compute the Multidimensional Poverty Index (Poverty Gap). [2.5 marks] Question 1 [Total 10 marks] The purpose of this question is to construct a multidimensional poverty index using the data from Bangladesh for 1998, and to compare the result with a monetary index of poverty. To answer the questions, you have to use the hh.xls data. For the purposes of this exercise, there are seven dimensions of poverty, listed here along with the thresholds (i.e. the poverty lines) and weights I have explained these dimensions in the lecture. In case of uncertainty, please re-listen to the video clips. Dimension of poverty Distance to the nearest all-weather road Distance to the nearest bank Toilet facility Access to electricity Education of household head Household assets Household landholding Variable name distance d bank toilet hhelec educhead hassetg hhlandd Poor if: Distance is 3 km or more Distance is 3 km or more No modern toilet No electricity connection Less than 4 years of education Assets less than 100,000 taka Own less than 100 decimals Weight 0.125 0.125 0.125 0.125 0.25 0.125 0.125 Note: distances in the data are in km, toilet=1 for modern toilet, and 0 means no modern toilet, hhelec=1 means electricity connection, and 0 means no electricity connection, education is expressed in years, assets are expressed in taka, and landholding in decimals. a- Generate and indicator (that is variable set to 1, if the household is poor, and to 0, otherwise) for each dimension listed in the table. Label these indicators as pdistance, pbank, ptoilet, phhelec, peduchead, phhassetg, phhlandd. [1.5 marks] b- What is the percentage of households who are deprived in each of these subdimensions. [1 mark] Percentage Dimension pdistance pbank ptoilet, phhelec peduchead, phhassetg phhlandd C- Compute the deprivation score for each household (to compute deprivation score see lecture notes), call this deprivation score pdimensions. What is the maximum value of the deprivation score and what is the minimum value of the deprivation score interpret these values. [2.5 marks). d- Define a household as multidimensionally poor if it is deprived on at least half of the dimensions (i.e., the multidimensional poverty threshold of 0.5). What the multidimensional headcount poverty rate. Use the normalized score to compute your Multidimensional headcount poverty rate. [2.5 marks] e- Compute the Multidimensional Poverty Index (Poverty Gap). [2.5 marks]