# Re: st: poverty/inequality analysis

 From "Austin Nichols" To statalist@hsphsun2.harvard.edu Subject Re: st: poverty/inequality analysis Date Mon, 21 Jul 2008 12:01:33 -0400

```Lola Jackson <lola_jackson@ymail.com>:
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.

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

On Mon, Jul 21, 2008 at 11:38 AM, Lola Jackson <lola_jackson@ymail.com> 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
*
*   For searches and help try:
*   http://www.stata.com/help.cgi?search
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/
```