Foreword
can construct macrodata series suitable for empirical analyses. Students can replicate and check the robustness of published results. Several recent initiatives have lowered the cost of accessing household datasets. The goal of this book, then, is to reduce the cost of analyzing data and sharing findings with interested parties. This book has two unique aspects. First, the theoretical discussion is based on a highly accessible, unified treatment of inequality and poverty in terms of income standards or basic indicators of the overall size of the income distribution. Examples include the mean, median, and other traditional ways of summarizing a distribution with one or several representative indicators. The literature on the measurement of inequality has proliferated since the 1960s. This book provides an excellent overview of that extensive literature. Most poverty measures are built on two pillars. First, the “poverty line” delineates the income levels that define a poor person, and second, various measures capture the depths of the incomes of those below the poverty line. The approach here considers income standards as the basic measurement building blocks and uses them to construct inequality and poverty measures. This unified approach provides advantages in interpreting and contrasting the measures and in understanding the way measures vary over time and space. Second, the theoretical presentation is complemented by empirical examples that ground the discussion, and it provides a practical guide to the inequality and poverty modules of the ADePT software developed at the World Bank. By immediately applying the measurement tools, the reader develops a deeper understanding of what is being measured. A battery of exercises in chapter 2 also aids the learning process. The ADePT software enables users to analyze microdata—from sources such as household surveys—and generate print-ready, standardized tables and charts. It can also be used to simulate the effect of economic shocks, farm subsidies, cash transfers, and other policy instruments on poverty, inequality, and labor. The software automates the analysis, helps minimize human error, and encourages development of new methods of economic analysis. For each run, ADePT produces one output file—containing your selection of tables and graphs, an optional original data summary, and errors and notifications—in Microsoft Excel® format. Tables of standard errors and frequencies can be added to a report, if desired.
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