1. Generate and indicator (that is variable set to 1, if the household is poor, and to 0, otherwise) for each dimension listed in the table. Label these indicators as pdistance, pbank, ptoilet, phhelec, peduchead, phhassetg, phhlandd. [1.5 marks]
  2. b- What is the percentage of households who are deprived in each of these subdimensions.
  3. c- Compute the deprivation score for each household (to compute deprivation score see lecture notes), call this deprivation score pdimensions. What is the maximum value of the deprivation score and what is the minimum value of the deprivation score interpret these values. [2.5 marks].
    1. d- Define a household as multidimensionally poor if it is deprived on at least half of the dimensions (i.e., the multidimensional poverty threshold of 0.5). What the multidimensional headcount poverty rate. Use the normalized score to compute your Multidimensional headcount poverty rate. [2.5 marks]
    2. e- Compute the Multidimensional Poverty Index (“Poverty Gap”). [2.5 marks]
    Question 2 [5 marks]
    1. a- Using data (ECO2117 final SAOAP.xls) on children’s weight for height compute the average weight for height z-scores (whz) for children with an eligible person in the household and the average weight for height z-scores for those who do not have an eligible person in the household (noElig=1). What is the impact of pension eligibility on children whz? Interpret your result in one sentence as we did in the lectures. [2.5 marks]
    2. b- Repeat the same as in question (a) but for children who are 2 years old or less. Compare your results with those you obtained in (a). [2.5 marks]

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