Final

Final. = &nb= sp; = &nb= sp; = &nb= sp; Spring 2006

Name:______________________= _ &= nbsp; &nbs= p; Economics of Development

Each question is worth the total number of points in parentheses; sub-questions are allocated an equal share of the total points= per question. Final is worth 30 p= oints.

1) True = or False (5 points)

Statement	Circle whether the statement is true or false
The rate of population growth worldwide over the pas= t 10 years is the highest ever recorded in history.	True &nbs= p; False
The Lorenz curve is the inverted “U” sha= ped relationship between income per capita and the Gini coefficient.	True &nbs= p; False
In a cross section of countries, there is evidence o= f a positive correlation between income per capita and the share of the population living in urban areas.	True &nbs= p; False
For developing countries taken as a whole, the ratio= of the share of the total labor force in agriculture divided by the share of this sector’s contribution to GNP is greater than one.	True &nbs= p; False
For developing countries taken as a whole, food prod= uction per capita has been increasing since the 1980s.	True &nbs= p; False
For developing countries taken as a whole, the femal= e literacy rate is now equal to the male literacy rate.	True &nbs= p; False
Net National Product =3D GNP – depreciation of manufactured capital assets – depreciation of environmental capital= .	True &nbs= p; False
The Gini coefficient satisfies the principle of “scale independence”.	True &nbs= p; False
The Average Poverty Gap is the Total Poverty Gap div= ided by the total population size, N. <= /span>	True &nbs= p; False
Height for age is a measure of past undernutrition.	True &nbs= p; False
The Total Poverty Gap measure is sensitive to redistribution of income amongst those below the poverty line.	True &nbs= p; False
The Gini coefficients for land ownership in Latin Am= erican countries tend to be lower than those found in other parts of the world.<= /p>	True &nbs= p; False

2) Poverty measures. (4 points)

Person number	Income per day
1	$0.45
2	$0.80
3	$0.90
4	$0.91
5	$1.05
6	$4.24
7	$5.80
8	$7.00
9	$9.85
10	$12.00

TOTAL INCOME &nbs= p; &= nbsp; &nbs= p; &= nbsp; $43.00

a) What = is the headcount (H) and the headcount index (HI) of a= bsolute poverty if the absolute poverty line is defined as $1 per person per day?

b) If we= take ten cents from person 1 and give it to person 4, describe how this impacts = your answer to (a) and discuss the issue this raises about the use of H and HI as poverty measures.

c) What = is the headcount and the headcount index of absolute p= overty if the absolute poverty line is defined as $0.50 per person per day?

d) What = is the Normalized Average Poverty Gap if the absolute poverty line is defined as $= 0.50 per person per day?

3) More about Measures. (3 points).

a) Defin= e the Human Development Index (HDI).

b) Defin= e the Human Poverty Index (HPI-1). =

c) What = is the difference between the average income shortfall and the average poverty gap= ?
4) Population issues. (3 points)

a) Draw = a figure illustrating the demographic transition noting the different stages.

b) What = could cause a country get caught in stage II of the demographic transition?

c) How c= an lowering child mortality rates lead to a decrease in the rate of population growth?

5) More population issues. (2 points)

Hidden momentum of population grow= th.

The ten women in the post reproductive cohort had a to= tal fertility rate of 4 during their reproductive years.

50% of their children were female and are in the curre= nt reproductive cohort (20 of them) which has a total fertility rate of 3, 50%= of which will be females (30 of them).

If we achieve a fertility rate of 2 for the youth and ensuing generations, what will the size of the total population be in Generation 4?

	G= en 1	G= en 2	G= en 3	G= en 4
y= outh	30
r= eproductive	20
p= ost reproductive	10
F= emale population	<= o:p>	<= o:p>	<= o:p>	<= o:p>
T= otal population	120

6) Inequ= ality. (2 points)

Draw a Lorenz curve and illustrate how to calculate a = measure of inequality from this Lorenz curve.

7) Kuzne= ts curves. (3 points)

a) Draw = the original Kuznets curve.

b) Expla= in the logic behind the shape of this curve.

c) Draw = an environmental Kuznets curve.

d) Explain the logic behind the shape of this curve. <= /p>

8= ) Match the number to the concept (3 points)

Number		Concept	Which number matches the concept
41%	1) Replacement level for the total fertility rate
75%	2) Current world population Estimate
2.1	3) Share of world’s population in developing countries
6.1 billion	4) Sub-Saharan Africa’s private rate of return to primary education
58%	5) Share of developing country labor force involved = in agriculture
16 billion	6) Est= imated impact in dollars of a 2.5 degree C increase in average temperature on an= nual returns to cropland in Sub Saharan Africa
1.3	7) Cur= rent rate of world population growth in percent

9= ) Poverty. (3 points)

a) Contrast chronic poverty to transitory poverty by defining each.

b) Contrast income poverty to asset poverty by defining each.

c) Summa= rize Krishna’s main findings with regard to the ca= uses of falling into poverty in his World Development article.

10) Inco= me distribution (2 points)

Person number<= /o:p>	Income per day=
1=	$0.05
2=	$0.45
3=	$0.50
4=	$1.50
5=	$2.50
6=	$2.75
7=	$3.25
8=	$4.00
9=	$5.00
10	$6.20
11	$6.50
12	$7.00
13	$9.00
14	$12.00
15	$14.23
16	$16.57
17	$17.30
18	$24.00
19	$47.00
20	$90.00

= &nb= sp; = &nb= sp; = &nb= sp; Total: $269.80

a)What share of income is h= eld by the highest decile and what share is held by the lowest decile?

b)What share of income is h= eld by the highest quartile and what share by the lowest quartile?

c) What = share of income is held by the highest quintile and what share by the lowest quintil= e?

Extra Credit (1 point, no partial credit)

=3D

When alpha =3D2. Prove.