# Are/ecn 115a problem set 1: income, poverty & inequalityin rural

**ARE/ECN 115A**

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**PROBLEM SET 1: INCOME, POVERTY & INEQUALITYIN RURAL MEXICO**

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You obtain use basis from the 2008 Mexico National Countrified Common Superintend to examine destitution in countrified Mexico.[1]You may claim that the basis were generated from a weak stray exemplification in which the population of cause is all commons in countrified Mexico. For artlessness, claim that each common has a one part. The common basis finish determined “Mexico Common Data” is available on SmartSite. This basis set contains the aftercited variables for the 1,437 exemplificationd commons:

· ** ID**: The common identifying code

· ** Y_{i}:**The common’s proceeds in 2007,

*excluding synod make-overs*

· ** T_{i}: **The equality of proceeds make-overred from the synod to common

*i*.

1. What is your worth of medium common proceeds excluding synod make-oversfor countrified Mexico in 2007? In correspondent this inquiry, narration the aftercited:

a. The exemplification medium, : ______

b. The exemplification antagonism, : ______

c. The antagonism of the exemplification medium, : ______

d. The type falsity of the exemplification medium, : ______

e. The 95% faith season of the exemplification medium, 95% C.I.: _________

2. In the year of the superintend, the per-capita prop destitution sequence in countrified Mexico was 7,596 pesos. Based on this prop destitution sequence, proportion the destitution headcount protest and aggregate destitution gap. Below, narration and *briefly *explain what each one mediums.

a. The Destitution Headcount Index:

b. The Aggregate Destitution Gap (*not the protest*):

c. The Squared Destitution Gap Index:

Mexico has two deep synod programs that make-over proceeds to countrified commons. The primeval is *PROCAMPO, *which pays a unwandering equality per acre to farmers who grew basic grains preceding to the North American Free Trade Agreement (NAFTA). The goal of PROCAMPO was to reinstate pre-NAFTA output worth props, which were no longer perceiven lower NAFTA. The second is *OPORTUNIDADES*, a well-being program that gives payments to weak women supposing that their progeny are enrolled in schools and entertain vigor check-ups. **Let’s circumvent the commons that entertaind some make-overs Recipients andthose that entertaind no make-overs Non-Recipients**.

3. Fill in the consultation adown, where now denotes common proceeds *including* synod make-overs.

Recipients

Non-Recipients

95% C.I.

4. What is the variety in proceeds including make-overs among case and non-case commons?

a. Income variety:

b. Is this variety *statistically* suggestive? How do you perceive?

c. Is this variety *economically* suggestive? Briefly prop your response.

5. Compute the Gini protest for case and non-case commons. It would be easiest to use the Gini protest formula from page 121 of the Taylor &Lybbert quotation. (Round-off to two decimal places)

a. Gini protest for cases:

b. Gini protest for non-recipients:

6. Construct two Lorenz curves, one for cases and another for non-recipients. First, knot the commons into impure proceeds categories as defined adown. Complete the consultation, **and** then graph the two Lorenz curves in **one graph** (using abound). Do not obliviate to comprise the aim [0,0] in your graphs. When completing the consultation, complete to 1 decimal (i.e. 3.2%).

**Recipients**

Income Category

Cumulative % of Households

Cumulative % of Proceeds

1

25%

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2

50%

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3

75%

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4

100%

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**Non-Recipients**

Income Category

Cumulative % of Households

Cumulative % of Proceeds

1

25%

** **

2

50%

** **

3

75%

** **

4

100%

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