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wouldn’t change both, violating the transfer principle. Certainly, the headcount ratio’s insensitiveness to the depth and distribution of poverty just isn’t a minor issue. It has direct policy implications. If this was the official poverty measure in a rustic , a government interested in maximizing the impression of resources on poverty reduction would have all of the incentives to allocate them among the many least poor, those that are nearer to the poverty line, The hottest product american flag texas flag all over print flag leaving the lives of the poorest poor unchanged. The headcount ratio is essentially the most generally used poverty measure worldwide. However it offers incentives for politicians to raise these individuals who’re closest to the poverty line over it. If a politician as an alternative elects to assist the acute poor, the additional effort required will not enhance the brand new headcount ratio. If we use the Poverty Gap measure (FGT-1) as an alternative, the politician is equally pleased with elevating a particularly poor individual’s earnings by $10 as elevating a person who’s $10 beneath the poverty line above it. If we use the Squared Poverty Gap measure (FGT-2), the politician has a far greater triumph to report in her speech if she has helped the very poorest individual

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