Chapter 3: How to Interpret ADePT Results
average normalized gap among the poor, or a decrease in inequality among the poor in terms of the generalized entropy measure. For the GEL 75.4 per month poverty line, the poverty gap measure for Georgia increased from 9.7 in 2003 [3,C] to 10.1 in 2006 [6,C]. This increase comes from both a headcount ratio increase from 29.9 percent [3,A] to 31.0 percent [6,A] and an income gap ratio increase from 32.3 [3,B] to 32.6 [6,B]. However, the urban poverty gap measure increase derives from an increase in the headcount ratio and a reduction in the income gap ratio. In contrast, the rural poverty gap measure increase was a result of an increase in the income gap ratio because the rural headcount ratio fell slightly between 2003 and 2006. Some interesting results are also evident when the poverty line is set at GEL 45.2 per month. The urban poverty gap measure does not change because an increase in the number of poor has been offset by an income gap ratio decrease. In fact, the total poverty gap measure increase from 3.0 in 2003 [9,C] to 3.2 in 2006 [12,C] was caused solely by an increase in the headcount ratio from 10.2 percent [9,A] to 10.7 percent [12,A], because the income gap ratio remained unchanged at 29.7 [9,B] and [12,B]. Lessons for Policy Makers The squared gap measure depends on another component: inequality among the poor. Surprisingly, inequality among the poor does not change between 2003 and 2006 for both the higher and the lower poverty lines. For both poverty lines and both years, inequality among the poor is higher in the rural area. Thus, not only does the number of rural poor increase when the poverty line is GEL 45.2, but also the average normalized shortfalls and inequality across the poor go up. Quantile Incomes and Quantile Ratios Besides analyzing poverty, one must understand the situation of the relatively poor population compared to the rest of the population. Table 3.5 reports five quantile per capita expenditures (PCEs) and certain quantile ratios of per capita consumption expenditure for Georgia and its rural and urban areas. It compares two different periods: 2003 and 2006. Table rows denote three geographic regions: urban, rural, and all of Georgia
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