Appendix
Sensitivity of Watts Index, SST Index, and CHUC Index to Poverty Line The exercise in table A.4 is analogous to the exercise for checking the elasticity of poverty measures to per capita consumption expenditure, but it is more rigorous. It is always possible to find a certain percentage of decrease in the poverty line that matches the increase in the consumption expenditure for everyone by 1 percent. In this exercise, we check the sensitivity of poverty measures by changing the poverty line in more than one direction. The table shows how the actual headcount ratio changes as the poverty line changes from its initial level, whether GEL 75.4 per month or GEL 45.2 per month. Rows denote the change in poverty line in both upward and downward directions. Columns report the change in three poverty measures: Watts index, SST index, and CHUC index. The variable is per capita consumption expenditure measured in lari. This table shows results for 2003 only, but this analysis can be conducted for any year. Columns A and B report the national Watts index for different poverty lines, and column C shows the change in the index from the actual poverty line. The rows corresponding to +5 percent denote the results for a Table A.4: Sensitivity of Watts Index, SST Index, and CHUC Index to the Choice of Poverty Line, 2003 Watts index
Change from Change from Change from SST index CHUC index actual (%) actual (%) actual (%)
A
B
C
D
E
F
1 2 3 4 5 6 7
Poverty line = GEL 75.4 Actual +5% +10% +20% −5% −10% −20%
13.9 15.4 17.0 20.3 12.4 11.1 8.5
0.0 11.0 22.4 46.1 −10.5 −20.4 −38.8
17.5 19.2 20.9 24.3 15.9 14.3 11.2
0.0 9.6 19.2 38.5 −9.3 −18.4 −35.9
19.6 21.3 23.1 26.6 17.8 16.1 12.8
0.0 9.0 18.0 35.8 −8.9 −17.6 −34.6
8 9 10 11 12 13 14
Poverty line = GEL 45.2 Actual +5% +10% +20% −5% −10% −20%
4.3 4.8 5.4 6.6 3.8 3.3 2.5
0.0 12.2 25.3 54.0 −11.6 −22.3 −41.5
5.9 6.6 7.3 8.9 5.2 4.6 3.5
0.0 11.8 24.2 51.3 −11.3 −21.9 −40.8
6.9 7.7 8.5 10.2 6.1 5.4 4.2
0.0 11.3 23.2 48.6 −10.8 −21.1 −39.7
Source: Based on ADePT Poverty and Inequality modules using Integrated Household Survey of Georgia 2003. Note: CHUC = Clark-Hemming-Ulph-Chakravarty; SST = Sen-Shorrocks-Thon.
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