ECON30042
Topics in Inequality and Poverty
Due Friday 8 March 2024, 5.00pm.
The task of this assignment is to complete some inequality-related calculations using household survey data. You must use the data from your assigned country for your report. Check the file Country Allocation.xlsx to find what country you are assigned to (to be given at the end of Week 22).
You should include the following (% of total mark):
1. (30%) Calculate Mean Log Deviation (MLD) for your sample using:
a) Per-capita expenditure
b) Expenditure with square-root economies of scale (no adult equivalence) and
c) Expenditure with an adult equivalence scale (no economies of scale), setting children 14 years and younger equal to one-half of adults.
For the purpose of this assignment, n is the number of households.
Next, create a figure with the distributions of the three expenditure variables above, for values of expenditure $50 per day and below. With reference to this figure, explain the differences in the MLD you find for the three expenditure variables.
2. (20%) Create a figure comparing Lorenz curves for households in urban and rural areas respectively using per-capita expenditure. Include only households with per-capita expenditure under $50 per day. Briefly discuss your findings.
3. (30%) Determine the extent of inequality between and within urban and rural areas. Create a table with the following decomposition using per-capita expenditure:
a) MLD for within urban and rural areas and the proportion of total MLD this represents.
b) MLD for between urban and rural areas and the proportion of total MLD this represents.
Briefly discuss your findings. For the purpose of this assignment, n is the number of households and population shares refer to the share of households in each area.
4. (20%) Using a regression, explore what variables are correlated with household per-capita expenditure. The regression should take the following form:
yi = α + βXi + εi
where yi is equal to a household’s logged per-capita expenditure. Xi is a collection of household-level variables that include specifically: head education, head age, head marital status, household size, share of household under 14. Run this regression for urban and rural households separately. Create a table with your results. Discuss your results and explain why they provide insight into the inequality found in your data, making reference to your results from the previous questions.
Please keep your discussions/explanations to a maximum of 150 words. Ensure that your tables look professional and have appropriate formatting (this is part of your mark).
Upload a Word or pdf document with the answers to the above questions as well as the files used to make your calculations (e.g. Excel, R, Python files) to the appropriate folder on Blackboard by the due date. When uploading your solutions, please make sure you use the country name you were assigned to as the title of the file. Standard university penalties will apply for late submissions. Marks will be deducted for missing calculation files.