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Re: st: poverty/inequality analysis

From   "Austin Nichols" <>
Subject   Re: st: poverty/inequality analysis
Date   Mon, 21 Jul 2008 12:01:33 -0400

Lola Jackson <>:
This is as much a theoretical problem as a programming problem.  Do
you want to apply a mean-preserving contraction (the opposite of a
mean-preserving spread) and a shift in the mean, to different degrees,
to a given distribution to achieve a specified percent below a given
threshold?  That is not how changes in distribution or inequality
usually happen, but is more like your stated end.

Maybe you could frame your problem in terms of data, e.g. start with

webuse psidextract, clear
keep if t==7
kdensity lwage

On Mon, Jul 21, 2008 at 11:38 AM, Lola Jackson <> wrote:
> Dear Statalisters
> I am analysing the relationship between poverty, inequality, and growth using
> multi-year survey data. I am wondering whether there are any existing Stata
> routines that can help me. I have looked at -gidecomposition- and it is similar
> but not quite. I need to calculate the growth/inequality combinations that
> would result in a given reduction in poverty (where poverty is measured as % of
> people below a fixed numerical poverty line) over 2 periods. So in order to
> reach an exogenously specified reduction in poverty (e.g. that no more than 5%
> of people should be below the poverty line in period 2, down from say 7% in
> period 1), there could either be fast growth with the existing income
> distribution; or no growth with a shift to a more egalitarian distribution; or
> more likely some combination of the two. In a way a similar type of thing to -gidecomposition-,
> but sort of starting at the other end.
> I was thinking of doing this 'manually' by adjusting growth and distribution and
> seeing what the poverty outcome is (even though the poverty outcome is actually
> what I want to set exogenously). But this is easier on the growth part than on
> the distribution part. I could easily impose different growth rates by
> adjusting all incomes by different factors. I'm not sure how one could 'impose'
> a redistribution component. Also it seems to me that there should be a more
> efficient/accurate way of doing this! (I don't know anything about advanced programming
> in Stata but am trying to learn!)
> Thank you for any suggestions.
> Best,
> Lola
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