Factors determining poverty and inequality in India by Tarun Das

8/14/2019 Factors determining poverty and inequality in India by Tarun Das

1/17

Quantitative Modeling-Part-3

Factors DeterminingPoverty in India

Presented by

Dr Tarun Das


2/17

2

1.1 Improvement inHuman Development

Poverty ratio declined:from 39% in 1987-88 to 36% in 1993-

94, further to 26% in 1999-2000.

Infant Mortality rate declined:from 94 in 1988 to 70 in 2001

Literacy rate improved:

from 52% in 1991 to 65% in 2001

Real wages for farm labour hadan increasing trend in 1990s.


3/17

3

0

10

20

30

40

50

60

70

1985-86 1989-90 1992-93 1995-96

L LM

0

2

4

6

8

10

12

14

1985-86 1989-90 1992-93 1995-96

M UM H

1.2 Husehold Distribution by income Classes (% to total)

NCAER

III. The Potential in the Next Decade


4/17

4

Households

NCAER

C o m p o s it io n o f H o u s e h o l d s b y I n c o m e

P r i c e s ) ( 1 9 9 4 - 9 5 t o 2 0 0 6 - 0 7 )

0

2 5

5 0

7 5

1 0 0

1 9 9 4 -9 5 2 0 0 1 -0 2 2 0 0 6 -0 7

Percentage

H

UM

M

LM

L

Note: L= LT 22500; LM=22501 TO

45000;M=45001 TO 70000;

UM=70001 TO 96000; H=GT

96000; * = Estimated



5/17

5

Note: H= GT 106000; M=25001 TO

106000;L= LT 25000; * = Projected

HHD SR= Household Savings

Rate

NCAER

C ompositio n of Househo lds by Income C lasseto 2006-07)

0

2 5

5 0

7 5

1 0 0

1 9 8 5 - 8 6 1 9 9 4 - 9 5 2 0 0 1 - 0 2 2 0 0 6 - 0 7

Perc

entage

L M H



6/17

6

H O U S E H O L D S B Y IN C O

8 6 .

5 5 .

3 5 .

6 9 .

1 1 2

1 4 0

4 . 1 3 .2 3 .

0

2 0

4 0

6 08 0

1 0 0

1 2 0

1 4 0

1 6 0

1 9 9 4 - 9 5 2 0 0 1 - 0 2 * 2 0 0 6 - 0 7 *

L M HNote: H= GT 106000; M= 25001 TO

106000 L= LT 25000; * Projected

Million Households

NCAER



7/17

7

2.1 Determinants of Poverty at the MacroLevel

Potential

Per ca


8/17

8

2.2 Determinants of Poverty at the MacroLevel

Other P

ratio:


9/17

9

2.3 Linear Regressionat Macro Level

Independent variables Equation-1 Equation-2Coefficient t-statistic Coefficient t-statistic

Constant 425.9 456.1

Per capita national income -0.002 2.58 -0.002 5.11

Growth rate of real GDP at factor cost 0.027 0.84

Growth rate of population 2.740 4.49 3.049 5.38

Inflation rate based on WPI 0.008 0.38

Gross fiscal deficit as percentage of GDP 0.123 1.60 0.085 1.11

Share of social sectors in central govt. expend. -1.358 4.78 -1.39 5.11Literacy rate -1.407 6.02 -1.26 7.38

Expectation of life -7.281 5.51 -7.68 5.86

Growth rate of agricultural GDP -0.018 1.28

Share of service sectors in overall GDP -0.466 2.34 -0.54 4.21

Share of private sector in overall GDP 0.217 1.25

Share of private sector in gross domestic invest. -0.067 3.42 -0.07 4.18

Gini ratio for consumer expenditure 43.801 4.16 44.06 4.11

Time (1977-78=1) -6.929 6.31 -6.96 6.34

R squared 0.999 0.999

No. of observations 23 23


10/17

10

2.4 Linear Regression at MacroLevel

Independent variables Equation-3 Equation-4

Coefficient t-statistic Coefficient t-statistic

Constant 47.861 41.594



Time (1977-78=1) -0.540 4.51

R squared 0.985 0.969



11/17

11

2.5 Log-Linear Regression at MacroLevel

Independent variables (Log of) Equation-1

Log-Linear

Equation-2

Semi-log

Log of Poverty ratioas the Dependent

variable

Poverty ratio as theDependent variable


Constant 41.43 1290


Growth rate of real GDP at factor cost 0.003 0.73

Growth rate of population 0.021 1.96 1.88 1.96

Inflation rate based on WPI 0.014 3.08

Gross fiscal deficit as percentage of GDP 0.025 1.87 1.09 0.44

Share of social sectors in central govt. expend. -0.043 1.98 -0.90 8.06

Literacy rate -3.979 9.00 -114 3.44

Expectation of life -3.622 3.17 -156 1.95

Growth rate of agricultural GDP -0.003 0.83

Share of service sectors in overall GDP -1.078 5.79 -31.6 5.77

Share of private sector in overall GDP 0.190 0.61Share of private sector in gross domestic invest. -0.052 2.04 -3.56 3.23


Time (1977-78=1) -0.139 6.50 4.32 4.92

R squared 0.999 0.999



12/17

12

2.6 Log-Linear Regression at MacroLevel

Independent variables (Log of) Equation-3

Semi-log

Equation-4

Semi-log


Constant 144.99 317.96Per capita national income -10.82 1.98 -29.79 24.41


Time (1977-78=1) -0.592 3.53

R squared 0.980 0.968



13/17

13

3.1 Log Linear Regressionat State Levels (Panel Data)

Independent variables (log of) Rural sector Urban sector Combined

Coeffi-

cient

t-

statistic

Coeffi-

cient

t-

statistic

Coeffi-

cient

t-

statistic

Constant 30.454 15.164 19.34

Time (catch-all variable, 1983=1) 0.060 0.93 -0.007 0.16 -0.016 0.46

Per capita consumption expenditure -0.019 6.82 -0.023 9.50 -0.016 7.43Rate of unemployment 0.247 2.57 0.004 1.97 0.212 2.80

Literacy rate 0.612 1.96 0.926 1.55 0.265 1.09

Expectation of life -6.453 3.93 -3.429 2.45 -3.037 2.74

Old-age dependency ratio 0.773 2.21 0.121 0.51 -0.837 2.60

Gini ratio for consumer expenditure 1.346 2.81 0.150 1.97 0.629 2.00

Degree of urbanisation -0.380 2.12 0.466 4.93 0.032 1.98

R squared 0.856 0.793 0.831

No. of observations 68 68 68


14/17

14

3.2 Log Linear Regression

at State Levels (Panel Data)

Independent variables (log of) Rural sector Urban sector Combined

Coeffi-

cient

t-

statistic

Coeffi-

cient

t-

statistic

Coeffi-

cient

t-

statistic

Constant 25.183 20.233 19.574

Time (catch-all variable, 1983=1) 0.027 0.49 -0.022 0.54 -0.016 0.45

Inequality adjusted pc consum. Exp -0.030 8.42 -0.029 9.51 -0.022 8.56Rate of unemployment 0.242 2.62 0.046 1.53 0.211 2.77

Literacy rate 0.574 1.91 0.861 1.41 0.244 1.01

Expectation of life -5.674 3.59 -4.616 3.42 -3.334 3.06

Old-age dependency ratio 0.901 2.26 0.237 1.95 0.775 2.47

Degree of urbanisation -0.272 2.01 0.311 3.65 0.043 2.17

R squared 0.864 0.780 0.820

No. of observations 68 68 68


15/17

15

3.3 Log Linear Regressionat State Levels

(Panel and Pooled Data

Independent variables (log of) Equation-1 Equation-2


Constant 26.290 24.833

Dummy (0 for Urban, 1 for National, 2 for Rural) -0.298 4.66 -0.271 5.42

Time (catch-all variable, 1983=1) 0.125 0.12 0.093 0.93

Per capita consumption expenditure -0.017 9.91Inequality adjusted per capita consump. Exp. -0.025 12.19

Rate of unemployment 0.241 4.07 0.227 3.96

Literacy rate 0.295 1.40 0.328 1.61


Old-age dependency ratio 0.448 2.21 0.367 1.96

Gini ratio for consumer expenditure 0.649 2.50

Degree of urbanisation 0.119 2.12 0.108 1.98R squared 0.710 0.727



16/17

16

3.4 Log Linear Regressionat State Levels

(Panel and Pooled Data

Independent variables (log of) Equation-1 Equation-2


Constant 38.18 33.307

Dummy (0 for Urban, 1 for National, 2 for Rural) -0.241 3.50 -0.337 6.06

Time (catch-all variable, 1983=1) 0.226 4.37 0.094 2.40

Per capita net state domestic product (NSDP) -0.658 7.18Inequality adjusted per capita NSDP -0.0006 8.76

Rate of unemployment 0.117 2.09 0.160 2.46

Literacy rate 0.823 3.39 0.575 2.47


Old-age dependency ratio 1.019 4.76 .243 6.53

Gini ratio for consumer expenditure 0.861 3.07

Degree of urbanisation 0.005 2.00 0.076 2.01

R squared 0.685 0.690



17/17

17

Thank you

Have a Good Day

Factors determining poverty and inequality in India by Tarun Das

Documents

Transcript of Factors determining poverty and inequality in India by Tarun Das