The poverty gap index is a measure of the degree of poverty. It is defined as extent to which individuals on average fall below the poverty line, and expresses it as a percentage of the poverty line.^[1]

The poverty gap index is an improvement over the poverty measure head count ratio, which simply counts all the people below a poverty line in a given population and considers them equally poor.^[2] Poverty gap index estimates the depth of poverty by considering how far the poor are from that poverty line on average.^[3]

The poverty gap index sometimes referred to as poverty gap ratio or pg index is defined as average of the ratio of the poverty gap to the poverty line.^[4] It is expressed as a percentage of the poverty line for a country or region.^[5]

Significance

The most common method measuring and reporting poverty is the head count ratio, given as the percentage of population that is below the poverty line. For example, The New York Times in July 2012 reported the poverty head count ratio as 11.1% of American population in 1973, 15.2% in 1983 and 11.3% in 2000.^[6] One of the undesirable features of the head count ratio is that it ignores the depth of poverty; if the poor become poorer, the head count index does not change.^[7]

Poverty gap index provides a clearer perspective on the depth of poverty. It enables poverty comparisons. It also helps provide an overall assessment of a region's progress in poverty reduction and the evaluation of specific public policies or private initiatives.^[8]

Calculation

The poverty gap index (PGI) is calculated as,^[5]

${\displaystyle {\rm {PGI}}={\frac {1}{N}}\sum _{j=1}^{q}\left({\frac {z-y_{j}}{z}}\right)}$

or

${\displaystyle {\rm {PGI}}={\frac {1}{N}}\sum _{j=1}^{N}\left({\frac {(z-y_{j}).1(y_{j}<z)}{z}}\right)}$

where ${\displaystyle N}$ is the total population, ${\displaystyle q}$ is the total population of poor who are living at or below the poverty line, ${\displaystyle z}$ is the poverty line, and ${\displaystyle y_{j}}$ is the income of the poor individual ${\displaystyle j}$. In this calculation, individuals whose income is above the poverty line have a gap of zero.

By definition, the poverty gap index is a percentage between 0 and 100%. Sometimes it is reported as a fraction, between 0 and 1. A theoretical value of zero implies that no one in the population is below the poverty line. A theoretical value of 100% implies that everyone in the population has zero income. In some literature, poverty gap index is reported as ${\displaystyle P_{1}}$ while the head count ratio is reported as ${\displaystyle P_{0}}$.^[9]

Features

The poverty gap index can be interpreted as the average percentage shortfall in income for the population, from the poverty line.^[5]

If you multiply a country's poverty gap index by both the poverty line and the total number of individuals in the country you get the total amount of money needed to bring the poor in the population out of extreme poverty and up to the poverty line, assuming perfect targeting of transfers. For example, suppose a country has 10 million individuals, a poverty line of $500 per year and a poverty gap index of 5%. Then an average increase of $25 per individual per year would eliminate extreme poverty. $25 is 5% of the poverty line. The total increase needed to eliminate poverty is US$250 million—$25 multiplied by 10 million individuals.

The poverty gap index is an important measure beyond the commonly used head count ratio. Two regions may have the similar head count ratio, but distinctly different poverty gap indices. A higher poverty gap index means that poverty is more severe.

The poverty gap index is additive. In other words, the index can be used as an aggregate poverty measure, as well as decomposed for various sub-groups of the population, such as by region, employment sector, education level, gender, age or ethnic group.

Limitations

Poverty gap index ignores the effect of inequality between the poor. It does not capture differences in the severity of poverty amongst the poor. As a theoretical example, consider two small neighborhoods where just two households each are below the official poverty line of US$500 income per year. In one case, household 1 has an income of US$100 per year and household 2 has an income of US$300 per year. In second case, the two households both have annual income of US$200 per year. The poverty gap index for both cases is same (60%), even though the first case has one household, with US$100 per year income, experiencing a more severe state of poverty. Scholars, therefore, consider poverty gap index as a moderate but incomplete improvement over poverty head count ratio.^[10]

Scholars such as Amartya Sen suggest poverty gap index offers quantitative improvement over simply counting the poor below the poverty line, but remains limited at the qualitative level. Focusing on precisely measuring income gap diverts the attention from qualitative aspects such as capabilities, skills and personal resources that may sustainably eradicate poverty. A better measure would focus on capabilities and consequent consumption side of impoverished households.^[11] These suggestions were initially controversial, and have over time inspired scholars to propose numerous refinements.^{[2][12][13][14]}

Related measures

The Foster–Greer–Thorbecke metric is the general form of the PGI. The ${\displaystyle FGT_{\alpha }}$ formula raises the summands to the power alpha, so that FGT0 is the head count index, FGT1 the PGI and FGT2 the squared PGI.

Squared poverty gap index, also known poverty severity index or ${\displaystyle P_{2}}$, is related to poverty gap index. It is calculated by averaging the square of the poverty gap ratio. By squaring each poverty gap data, the measure puts more weight the further a poor person's observed income falls below the poverty line. The squared poverty gap index is one form of a weighted sum of poverty gaps, with the weight proportionate to the poverty gap.^[9]

Sen index, sometimes referred to ${\displaystyle P_{\text{SEN}}}$, is related to poverty gap index (PGI).^[2][15] It is calculated as follows:

${\displaystyle {\rm {P_{\text{SEN}}}}=H*G_{z}+PGI*(1-G_{z})}$

where, ${\displaystyle H}$ is the head count ratio and ${\displaystyle G_{z}}$ is the income Gini coefficient of only the people below the poverty line.

Watts index, sometimes referred to ${\displaystyle W}$, is related to poverty gap index (PGI).^[15] It is calculated as follows:

${\displaystyle {\rm {W}}={\frac {1}{N}}\sum _{j=1}^{q}\ln \left({\frac {z}{y_{j}}}\right)}$

The terms used to calculate ${\displaystyle W}$ are same as in poverty gap index (see the calculation section in this article).

Poverty gap index by country

This section needs to be updated. Please help update this article to reflect recent events or newly available information. (November 2020)

This section does not cite any sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (March 2024) (Learn how and when to remove this message)

The following table summarizes the poverty gap index for developed and developing countries across the world.

Zdroj:https://en.wikipedia.org?pojem=Poverty_gap_index
Text je dostupný za podmienok Creative Commons Attribution/Share-Alike License 3.0 Unported; prípadne za ďalších podmienok. Podrobnejšie informácie nájdete na stránke Podmienky použitia.

---



---

www.astronomia.sk | www.biologia.sk | www.botanika.sk | www.dejiny.sk | www.economy.sk | www.elektrotechnika.sk | www.estetika.sk | www.farmakologia.sk | www.filozofia.sk | Fyzika | www.futurologia.sk | www.genetika.sk | www.chemia.sk | www.lingvistika.sk | www.politologia.sk | www.psychologia.sk | www.sexuologia.sk | www.sociologia.sk | www.veda.sk I www.zoologia.sk

---

Poverty gap ratio for various countries

Country	Poverty line ($/month)[a]	Head count ratio (%)	Poverty gap index (%)	Year
Albania	38	0.62	0.19	2008
Angola	38	54.31	29.94	2000
Argentina[b]	38	0.92	0.65	2010
Armenia	38	1.28	0.25	2008
Australia	959	12.4	2.93	2010
Austria	1024	6.6	1.81	2010
Azerbaijan	38	0.43	0.14	2008
Bangladesh	38	43.25	11.17	2010
Belarus	38	0.1	0.1	2008
Belgium	930	8.8	1.80	2010
Belize	38	12.21	5.52	1999
Benin	38	47.33	15.73	2003
Bhutan	38	10.22	1.81	2007
Bolivia	38	15.61	8.64	2008
Bosnia and Herzegovina	38	0.04	0.02	2007
Botswana	38	31.23	11.04	1993
Brazil	350	3.91	3.62	2015
Burkina Faso	38	44.6	14.66	2009
Burundi	38	81.32	36.39	2006
Cambodia	38	22.75	4.87	2008
Cameroon	38	9.56	1.2	2007
Canada	1056	12.1	2.96	2010
Cape Verde	38	21.02	6.05	2001
Central African Republic	38	62.83	31.26	2008
Chad	38	61.94	25.64	2002
Chile	38	1.35	0.69	2009
China[c]	38	16.25	4.03	2005
Colombia	38	8.16	3.78	2010
Comoros	38	46.11	20.82	2004
Costa Rica	38	3.12	1.79	2009
Cote d'Ivoire	38	23.75	7.5	2008
Czech Republic	515	5.8	1.37	2010
Denmark	955	5.3	1.29	2010
Djibouti	38	18.84	5.29	2002
Dominican Republic	38	2.24	0.52	2010
Congo, Dem. Rep.	38	87.72	52.8	2005
Congo, Rep.	38	54.1	22.8	2005
Ecuador	38	4.6	2.1	2010
Egypt	38	1.69	0.4	2008
Estonia	38	8.9	4.4	2009
Ethiopia	38	39	9.6	2005
Fiji	38	5.9	1.1	2009
Finland	875	7.3	1.48	2010
France	861	7.1	1.44	2010
Gabon	38	4.8	.9	2005
Gambia	38	33.6	11.7	2003
Germany	918	11	3.67	2010
Georgia	38	15.3	4.6	2008
Ghana	38	28.6	9.9	2006
Greece