Quantitative Methods Exam 2

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  1. What is the difference between absolute and relative poverty?
    Relative Poverty differs on the level of poverty in particular countries.
  2. What is the rule of thumb for the Lorenz Curve?
    The further the bulge downward, the greater the degree of inequality
  3. What is the GINI Coefficient formula?
    Area A/(Area A + area B)
  4. How do you determine the GINI Coefficient with grouped data?
    The width of a rectangle is the width of the interval. The height of a rectangle is the average of the percentage of income at the two interval boundaries.
  5. What are 4 reasons to measure poverty?
    • to keep the poor on the agenda
    • Second, one needs to be able to identify the poor
    • Third, to monitor and evaluate projects and policy interventions that are geared towards the poor.
    • to evaluate the effectiveness of institutions whose goal is to help the poor.
  6. What does the Supplemental Poverty Measure (SPM) take into account?
    • governmental benefits
    • necessary expenses (eg. Taxes)
    • adds unrelated people that share resources (ex. foster and unmarried partners)
  7. What new thresholds does the SPM take into account?
    • minimum level of basic needs
    • geographic poverty thresholds
    • adds benefits & subtracts expenses
  8. What are the three poverty measures?
    • žThe headcount index (poverty rate) measures the proportion of the population that is poor.
    • The poverty gap index measures the extent to which individuals fall below the poverty line (the poverty gaps) as a proportion of the poverty line. 
    • The poverty severity index (squared poverty gap) averages the squares of the poverty gaps relative to the poverty line.
  9. What does the formula IPAT mean?
    Impact= Population*Affluence (GDP Per person)*Technology (units of impact per unit of GDP)
  10. To find the technology portion of an IPAT model, what formula would you put in?
  11. How do you find the technology input reduction factor?
  12. How do you calculate the width of a rectangle?
    • =C7-C6
    • Difference of upper and lower percent of population from Table A
  13. How do you calculate the width center?
    Average of percentage of income at two interval boundaries
  14. How do you find the area of a rectangle?
    [Area A height at center] * [width of rectangle]
  15. What is the STIRPAT formula and how is it interpreted?
    ln(Impact) = a# + b1#*ln(P) + b2#*ln(A) + b3#*ln(T)

    •b1# tells us how responsive Impact is to changes in Population, etc.
  16. Define Overall Inequality.
    it compares different groups characterized by AGE, RACE, ETHNICITY or GENDER
  17. Define Income Inequality.
    It compares the proportion of income of the POOR, RICH, and MIDDLE CLASS
  18. Define Absolute Inequality.
    the measure of people with income below a certain level
  19. Define Relative Poverty.
    people living with income below different levels depending on the country or area within a country
  20. Define Gini Coefficient
    a measure of the income inequality of the residents of a country or region
  21. Define the Cost of Basic Needs Approach.
    Approach to constructing a poverty line based on the cost of acquiring enough food for adequate nutrition, as well as other essentials such as clothing and shelter
  22. Define Subjective Poverty Line.
    Approach to constructing a poverty line based on asking people what minimum income level is needed to make ends meet
  23. Define Absolute Poverty Line
    A poverty line that remains fixed over time, being adjusted only for inflation
  24. Define Headcount Poverty Index.
    it measures the proportion of the population that is poor
  25. Define Poverty Gap Index.
    It measures the extent to which individuals fall below the poverty line (The Poverty Gap) as a proportion of the poverty line; the sum of these gaps measures the minimum cost of eliminating poverty
  26. Define Poverty severity index.
    it averages the squares of the poverty gaps relative to the poverty line
  27. What are some regional level causes level of poverty?
    • vulnerability to flooding or typhoons
    • remoteness
    • quality of governance
    • property rights and their enforcement
  28. What are some community-level causes of poverty
    • availability of infrastructure
    • availability of services
    • proximity to markets
    • social relationships
  29. What are some Household and Individual characteristics contributing to poverty?
    • demographic (household size, age structure, dependency ratio, gender of head)
    • economic (employment status, hours worked, property owned)
    • social (health and nutritional status, education, shelter)
  30. What are some groups of anti-poverty activities?
    • fostering opportunity
    • facility empowerment
    • addressing income secutity
  31. What is the common sense understanding of resilience?
  32. What is the engineering, psychology and disaster studies definition of resilience?
    a return to normalcy or return to equilibrium
  33. What is the complex adaptive systems analysis definition of resilience?
    it emphasizes how much multiple elements interact to produce dynamic feedbacks making a system more or less adaptable, that is, resilient to stress (which is a process, not a state or characteristic)
  34. What is a scenario?
    a set of reasonably plausible, but structurally different futures, due to external uncertainties or different policy options
  35. What is a baseline scenario?
    the scenario most likely to occur if governmental intervention in the development process does not change
  36. What are basic/export/non-local industries?
    industries that sell their goods and services outside the region
  37. What are service/local/non-export industries?
    they sell their services inside the region
  38. What is the economic base multiplier?
    the ratio of total employment to basic employment; tells how many total jobs are created from the addition of one basic job
  39. What is the Standard Industrial Code (SIC)?
    a coding system for industries that codes all industries by a 4-digit code
  40. What is the North American Industrial Classification System (NAICS)?
    a classification system for industries that codes industries by 6-digit codes at the highest level of detail; seen as a replacement for SIC
  41. What is the direct method of calculating base employment?
    survey of local firms
  42. What is the sector assignment of calculating base employment?
    • agriculture
    • mining
    • manufacturing
    • federal government
  43. What do location quotients say about base employment?
    All industries with location quotients above 1 are considered export industries
  44. What are the minimum requirements for base employment measurement?
    LQ comparison to minimum sector employment in similar areas  (Regression approach: predictive model for each sector)
  45. What is the constant share model?
    it assumes that local employment will continue to receive its past share of regional, state, or national employment
  46. What is the shift share analysis theory?
    It assumes local industries grow at the national growth rate, then at the same growth rate as their respective national industries; the remaining residual growth (or decline) is due to local factors, such as competitive advantage or disadvantage
  47. What is the location quotient?
    the ratio of an industries proportion of the local economy to that of the national ecomony
  48. What is the shift share national growth component?
    how much employment would have grown (or declined) if it equaled total national employment growth
  49. What is the Shift share industrial share component?
    how much more or less (compared to national growth) employment would have grown (or declined) if it equaled national industry employment growth
  50. What is the shift share local shift component?
    the remainder of local industry growth (or decline), often interpreted as local competitive advantage
Card Set
Quantitative Methods Exam 2
Quantitative Methods Course CP 6024
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