A Unified Approach to Measuring Poverty and Inequality
Overall Poverty Table 3.2 examines the performance of groups of people considered poor. It analyzes poverty in Georgia by decomposing across rural and urban areas using three different poverty measures: headcount ratio, poverty gap measure, and squared gap measure. These three poverty measures belong to the FGT (Foster-Greer-Thorbecke) family of poverty measures. Table rows denote three geographic regions: urban, rural, and all of Georgia (rows 3 and 6). The variable is monthly per capita consumption expenditure in lari. There are two poverty lines: GEL 75.4 per month and GEL 45.2 per month. Columns A and B report headcount ratios for 2003 and 2006, respectively. A region’s headcount ratio is the proportion of the population that is poor compared to that region’s total population. When the poverty line is GEL 75.4 per month, then the urban headcount ratio in 2003 is 28.1 percent [1,A]. This means that 28.1 percent of the population in the urban area belongs to households that cannot afford the per capita consumption expenditure of GEL 75.4 per month. The urban headcount ratio for 2006 is 30.8 percent [1,B]. Column C reports the change in urban headcount ratios over the course of these three years, which is an increase of 2.7 percentage points [1,C]. In contrast, the rural headcount ratio decreased by 0.5 percentage point from 31.6 percent [2,A] in 2003 to 31.1 percent [2,B] in 2006. Overall, Georgia’s poverty headcount has increased by 1.0 percentage point from 29.9 percent [3,A] to 31.0 percent [3,B]. Similarly, for the poverty line of
Table 3.2: Overall Poverty percent Headcount ratio
Poverty gap measure
Squared gap measure
2003
2006
Change
2003
2006
Change
2003
2006
Change
A
B
C
D
E
F
G
H
I
1 2 3
Poverty line = GEL 75.4 Urban 28.1 Rural 31.6 Total 29.9
30.8 31.1 31.0
2.7 −0.5 1.0
8.6 10.7 9.7
9.3 10.9 10.1
0.7 0.2 0.4
3.9 5.2 4.6
4.0 5.5 4.8
0.1 0.3 0.2
4 5 6
Poverty line = GEL 45.2 Urban 8.9 Rural 11.4 Total 10.2
9.3 12.1 10.7
0.4 0.7 0.5
2.4 3.6 3.0
2.4 4.0 3.2
0.0 0.3 0.2
1.0 1.7 1.4
1.0 1.9 1.4
−0.1 0.2 0.1
Region
Source: Based on ADePT Poverty and Inequality modules using Integrated Household Survey of Georgia 2003 and 2006.
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