A Unified Approach to Measuring Poverty and Inequality
In figure 3.1, the solid curve is urban Georgia’s density function for 2003, and the dotted curve is the density function of urban consumption expenditure distribution for 2006. The median is an important income standard that can be found in the diagram. It is indicated by the corresponding vertical lines: solid line for 2003 and dotted line for 2006. A density function can also be useful for understanding a distribution’s skewness. As can be seen from figure 3.1, the density functions for both years are positively skewed. However, an important change from 2003 to 2006 is that more people mass around the distribution’s median in 2006. We can also see that the density functions for both years are unimodal. When more than one mode exists, a society is considered to be polarized by consumption expenditure or income. Standard of Living and Inequality across the Population Table 3.1 reports the mean and median per capita consumption expenditure and their growth over time, and the inequality across the population using the Gini coefficient. It also decomposes them across rural and urban areas and across two years: 2003 and 2006. Table rows denote three geographical regions: urban area, rural area, and all of Georgia (row 3). Per capita consumption expenditure is measured in lari per month. Columns A and B report the mean per capita consumption expenditure for 2003 and 2006, respectively. Column C reports the percentage change or growth in per capita expenditure over the course of these three years. The average per capita expenditure of the urban area in 2003 is GEL 128.9 [1,A], which is larger than the average rural per capita expenditure of GEL 123.5 [2,A]. The mean urban per capita expenditure in 2006 is GEL 127.3 [1,B],
Table 3.1: Mean and Median Per Capita Consumption Expenditure, Growth, and the Gini Coefficient Mean 2003 (GEL) Region 1 2 3
Urban Rural Total
2006 (GEL)
Median Growth (%)
2003 (GEL)
2006 (GEL)
Gini coefficient Growth (%)
2003
2006
Change (%)
A
B
C
D
E
F
G
H
I
128.9 123.5 126.1
127.3 124.8 126.0
−1.2 1.0 −0.1
108.4 101.5 104.7
101.1 105.3 103.3
−6.8 3.7 −1.4
33.5 35.3 34.4
35.6 35.1 35.4
2.2 −0.3 0.9
Source: Based on ADePT Poverty and Inequality modules using Integrated Household Survey of Georgia 2003 and 2006.
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