Chapter 3: How to Interpret ADePT Results
which fell by 1.2 percent [1,C]. The mean rural per capita expenditure, in contrast, increased by 1.0 percent to GEL 124.8 in 2006 [2,B]. Georgia’s overall per capita consumption expenditure in 2003 is GEL 126.1 [3,A], which fell by 0.1 percent to GEL 126.0 in 2006 [3,B]. Columns D, E, and F report the median per capita expenditures for 2003 and 2006 and their growth rates. The percentage changes in medians or median growths are much larger than the mean per capita expenditure growth. The rural median growth is 3.7 percent [2,F], whereas the urban median “growth” is –6.8 percent [1,F]. The overall change in median is –1.4 percent [3,F]. Columns G, H, and I use the Gini coefficient to capture inequality in the distribution. The rural Gini coefficient has marginally fallen from 35.3 [2,G] to 35.1 [2,H], while the urban Gini coefficient over these three years increased from 33.5 in 2003 [1,G] to 35.6 in 2006 [1,H]. The overall Gini coefficient changed by 0.9 from 34.4 [3,G] to 35.4 [3,H]. (Gini coefficient is reported on a scale from 0 to 100 in this chapter, rather than from 0 to 1.) Lessons for Policy Makers Note that the mean and the median, two different measures of standard of living, are differently sensitive to the distribution of per capita consumption expenditure. Mean is more sensitive to extreme values, whereas median is more robust to extreme values. For example, if the only change in the distribution of per capita expenditure is at the highest quintile or the lowest quintile, the change would be reflected by the mean, but the median would not change. In contrast, in certain situations, when changes occur in the middle of the distribution, mean per capita expenditures may remain unaltered, but the median may reflect the change. It is important to analyze and understand the growth in both these measures of central tendency. However, changes in different measures of central tendency do not provide enough information about the change in the overall distribution. They do not tell us how the spread or inequality within the distribution changes over time, which can be captured by an inequality measure. In the above exercise, rural mean and median per capita expenditure increased, but rural inequality marginally fell. On the contrary, the urban inequality has increased over these three years from 33.5 in 2003 [1,G] to 35.6 in 2006 [1,H], while the mean and median have fallen.
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