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# st: Re: simulating poverty by changing mean income

 From "R.E. De Hoyos" <[email protected]> To <[email protected]> Subject st: Re: simulating poverty by changing mean income Date Sat, 3 Sep 2005 19:36:43 +0100

Brian,

If I am following correctly, you want to compute the change in poverty following a distribution-constant change in average income. Any inequality measure satisfying general desired properties (for example the GE family), will be scale invariant. Therefore an increase of, say, 10% in all household incomes will increase mean incomes in the same proportion without affecting inequality and surely changing your FGT measures.

Using your household data, you can simulate a distribution-constant change in average income by adjusting all (or the population subgroup that you are interested on) household incomes accordingly and then compute your FGT measures.

I hope this helps,
Rafa
________________________
R.E. De Hoyos
Faculty of Economics
University of Cambridge
CB3 9DE, UK
www.econ.cam.ac.uk/phd/red29/

----- Original Message ----- From: "Brian Sartene" <[email protected]>
To: <[email protected]>
Sent: Saturday, September 03, 2005 4:44 PM
Subject: st: simulating poverty by changing mean income

```Dear all:
I have lorenz parameters for an income measure for
various groups in a household survey dataset and would
like simulate poverty levels (FGT measures) by
substituting various means for the actual mean.
Does anyone know of a way to do this (that doesn't
require starting at the very beginning, trying to
derive a general quadratic equation for the lorenz, &
then undertaking a lot of mathematical gymnastics)?
I'd be grateful for any suggestions.
Thanks very much.
Brian

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