Calculating Poverty Measures from the Generalized Beta Income Distribution
Data for measuring poverty and income inequality are frequently available in a summary form that describes the proportion of income or expenditure for each of a number of population proportions. While various discrete measures can be applied directly to data in this limited form, these discrete measures typically ignore inequality within each group. This problem can be overcome by fitting a parametric income distribution to the grouped data and computing required quantities from the estimated parameters of this distribution. In this paper we show how to calculate several poverty measures from parameters of the generalized beta distribution of the second kind, and its popular special cases. An analysis of poverty changes in ten countries from South and Southeast Asia is used to illustrate the methodology.
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