Chapter 3: How to Interpret ADePT Results
It is evident from the table that the overall headcount ratio in 2003 is 29.9 percent [3,A], which increased to 31.0 percent in 2006 [3,B]. These numbers can be verified from table 3.2. The actual change in the overall headcount ratio is 1.0 percentage point (rounded) [3,C]. The actual change is broken down into three components: growth effect, redistribution effect, and interaction effect. By looking at the corresponding figures in columns D, E, and F, we see that the change is caused mainly by redistribution rather than growth. We can verify from table 3.1 that growth in mean is negligible compared to change in inequality in terms of the Gini coefficient. The picture is slightly different for the urban and rural areas. The urban headcount ratio rose by 2.7 percentage points from 28.1 percent [1,A] to 30.8 percent [1,B], with both growth effect and redistribution effect being positive. The urban redistribution effect [1,E] is more than three times larger than the urban growth effect [1,D]. For the rural area, the headcount ratio fell from 31.6 percent [2,A] to 31.1 percent [2,B]. In this case, both the growth effect [2,D] and the redistribution effect [2,E] are negative. The appendix contains additional tables and figures that may be helpful in understanding concepts and results in terms of the data for Georgia in 2003 and 2006.
Note 1. For technical details, see Huppi and Ravallion (1991).
Reference Huppi, M., and M. Ravallion. 1991. “The Sectoral Structure of Poverty during an Adjustment Period: Evidence for Indonesia in the Mid-1980s.� World Development 19 (12): 1653–78.
223