Ugrás a tartalomhoz

## SOCIAL STATISTICS

Renáta Németh, Dávid Simon

ELTE

Some income distribution and poverty indices

## Some income distribution and poverty indices

- one of the most important type of resource indices

Problems of measuring income:

- the problem of calculating per capita income (household size and expenses do not show a steady increase)

- fluctuation in income, inflation

The indicators below are objective and relative and show the income distribution of the given group.

The indices of income distribution and their interpretation

Decile boundary indices

P10: the upper boundary of the lowest decile (% of median income)

P90: the lower boundary of the uppermost decile (% of median income)

P90/P10

Why is it based on the median?

What do P10 and P90 stand for?

Typical examples:

 1987 1992 1996 2001 P10 61 60 48 50 P90 173 183 191 184 P90/P10 2,81 3,07 3,95 3,68

Interpret the data and the change.

Total income indices

S1: the proportion of the total income of those in the first decile within the total income

Sn: the same for decile ’n’

 1987 1992 1996 2000 S1 4,5 3,8 3,2 3,3 S5+S6 17,9 17,4 17,5 17,3 S10 20,9 22,7 24,3 24,8 S10/S1 4,6 6,0 7,5 7,7

What do these indices tell us and how do they compare with P10, P90 and P90/P10?

Complex index

Éltető-Frigyes index: the ratio of the incomes above and below the mean

Gini index: see above.

 1987 1992 1996 2000 Gini-index 0,244 0,266 0,3 0,304 Éltető-Frigyes index 2,0 2,13 2,32 2,37

### Poverty indices

The media uses a wide range of poverty indices but how can we safely define poverty?

Problems:

• relative vs absolute poverty – poverty threshold: poverty measured against a social norm (what is considered the minimum of living standards in the given society) vs one’s own financial status compared with the rest of society

• the homogeneity (or lack thereof) of ’the poor’ as a group – great disparities can exist within this group

• the extent of poverty: the proportion of the poor in a society depends on our poverty definition

Relative poverty indices

Definitions of relative poverty threshold:

• half of the median

• half of the mean income

• quintile boundary

Poverty rate: the proportion of the poor in a society as defined by the given poverty threshold

Data:

 1991/1992 1996/1997 2000/2001 Poverty rate half of median 10,2 12,4 10,3 half of mean 12,8 17,8 14,4 quintile boundary 20 20 20

Poverty Gap Ration

the average income of the poor given in percentage of the poverty threshold

Data:

 Poverty threshold: 1991/1992 1996/1997 2000/2001 half of median 31,3 32,6 26,8 half of mean 33,2 31,1 27,3 quintile boundary 30,9 30,8 26,7

Interpret this index.

Poverty deficit

the amount of money given in percentage of the total income of the non-poor that could raise the income of the poor to reach the poverty threshold

Data:

 Poverty deficit: 1991/1992 1996/1997 2000/2001 half of median 1,4 1,8 1,2 half of mean 2,2 3,0 2,1 quintile boundary 3,8 3,5 3,3

Use the definition to interpret the data.