INEQUALITY AND POVERTY WITH STATA

We are going to use the EUSILC dataset for two years. These data are available in INE:

http://www.ine.es/dyngs/INEbase/es/operacion.htm?c=Estadistica_C&cid=12547361
76807&menu=resultados&secc=1254736195153&idp=1254735976608

(You can use European data)

Preparing data:

First, we must prepare the data. Note that some variables are in D-file and others in H-file:

1. Create a database with the following variables:

· year(HB010) · region (DB040)

· id (HB 030) · weight (DB090)

· nind (HX040) ·

· eq (HX240)

· housetype (HH010)

· income (vhRentaa)

· Equivalent Income (Income divided by the equivalence scale)

· Total weight (Household weight multiplied by the number of individuals)

· Classification1 (housetype, area, region, country, …)

How to prepare the assignment:

The discussion and the conclusions of inequality and poverty study must be longer than two
pages without graphs.

The scoring of the assignment will take into account the following points:

-It must have a cover or title page with your name.

-Spacing: 1.5. Font type: Times New Roman or Arial, 12 p.

-Each graphic or table must have clear and a comprehensive title.

-The discussion and conclusions must be clear and well written.

 ASSIGNMENT GUIDELINES:

INEQUALITY

1. Chose two years, for example 2020 and 2023, and a household classification, for example
area or some regions. Compute Inequality in the two years for the classification according to
two inequality indices.

a. Discuss and compare the inequality results for the chosen classification in the first
year.

b. Discuss and compare the inequality results for the chosen classification in the
second year.

c. Discuss and compare the changes between years.

WELFARE

2. Compute Welfare in the two years for the classification according to two welfare indices.

a. Discuss and compare the welfare results for the chosen classification in the first
year.

b. Discuss and compare the welfare results for the chosen classification in the second
year.

c. Discuss and compare the changes between years.

INEQUALITY AND WELFARE CURVES

3. Draw the Lorenz Curves and the Generalized Lorenz Curves and discuss the results for the
following three cases.

a. In the first year by classification.

b. In the second year by classification.

c. By years and by classification.

POVERTY

4. Compute Poverty for the chosen classification and the two years according to the FGT
indices for α=0, 1, 2. Use relative poverty lines.

a. Discuss and compare the poverty results for the chosen classification in the first
year.

b. Discuss and compare the poverty results for the chosen classification in the second
year.

c. Discuss and compare the changes between years and groups.

POVERTY CURVES

5. Draw the TIP curves and discuss the conclusions for the following three cases.

a. In the first year.

b. In the second year.

c. By years.

Note: It is not necessary to solve the sections step by step. You can study inequality, welfare and
poverty for a classification and two years taking into account what is asked in the sections.

2024/03/19