1. Critical review of the Mexico Poverty Assessment1.1. In not more than a couple of pages, indicate:What issues motivated the report?What analytical tools did the report use to analyze poverty and inequality?What are the main results of the poverty assessment?What are the main policy recommendations?1.2. With a focus on the heterogeneity of poverty, indicate which aspects of poverty appear to be most in need of detailed analysis when making a poverty assessment for Mexico.2. Macroeconomic context for your 1998-2004 poverty assessmentWas the 1998-2004 period one of growth or recession? What can you expect in terms of changes in poverty?3. Your poverty assessment3.1. Correlates of poverty in 2004Who are the poor?Where do they live?What do they do?What are their living conditions?3.2. Poverty profiles3.3. Poverty indicators4. Your inequality assessment 4.1. Inequality indicators4.2. Lorenz curves5. Your conclusions and policy recommendations5.1. Summary5.2. Policy implications for the current administrationJosiah Johnston and Suzie ShinSeptember 26, 2008International Economic Development Policy (ARE 253)Poverty Assessment in Mexico, 1998-2004 (Quantitative Policy Case #1)Table of Contents1. Critical review of the Mexico Poverty Assessment.....................................................................11.1. In not more than a couple of pages, indicate:.......................................................................11.2. With a focus on the heterogeneity of poverty, indicate which aspects of poverty appear to be most in need of detailed analysis when making a poverty assessment for Mexico................32. Macroeconomic context for your 1998-2004 poverty assessment..............................................33. Your poverty assessment..............................................................................................................43.1. Correlates of poverty in 2004..............................................................................................43.2. Poverty profiles....................................................................................................................63.3. Poverty indicators.................................................................................................................74. Your inequality assessment..........................................................................................................84.1. Inequality indicators.............................................................................................................84.2. Lorenz curves........................................................................................................................95. Your conclusions and policy recommendations.........................................................................105.1. Summary.............................................................................................................................105.2. Policy implications for the current administration............................................................10Figures & TablesFigure 1. GDP per capita in Mexico (local constant units), 1995-2007..........................................4Figure 2. Poverty Profiles for rural and urban pouplation in 1998 and 2004..................................6Table 1. Correlates of poverty in 2004............................................................................................6Table 2. Poverty Indicators..............................................................................................................8Table 3. Gini Coefficients for Rural and Urban populations in 1998 and 2004..............................8Table 4. Kuznets Ratios for the lower and upper deciles.................................................................9Table 5. Kuznets Ratios for the lower and upper quintiles..............................................................91. Critical review of the Mexico Poverty Assessment 1.1. In not more than a couple of pages, indicate: What issues motivated the report?The desire to understand poverty, assess attempts to address poverty, and inform future work... 1What analytical tools did the report use to analyze poverty and inequality? linear regression of data obtained from surveys, including quantile regression; tests of statistical significance; calculation of Gini coefficient; frequency and conditional distributions; comparisonof various income groups to base group, in "normal" times and during a shock; spatial analysis based on region and ethnicityWhat are the main results of the poverty assessment? A. Trends in education, health, and basic infrastructure services - "Both education and health stats, and access to social services, remain highly unequal. However, there has been a substantialimprovement in the participation of the poorest income groups in lower-secondary education andhealth services for the uninsured" (39). Gender gap in education has "virtually disappeared for younger cohorts" (40). "significant improvements in the health status of the population, a broadening of access to basic services, and growing public support for important public health measures" (43). "Coverage of the formal insurance system remains limited, especially for the poor. It appears to be particularly inequitable in the qualit of provisioning for catastrophic healthrisks...For the poor living in rural areas, poor states, and marginal urban areas, access to basic care remains limited and of low quality" (45). "The expansion of basic infrastructure services has included the poor. This is particularly notable for the gains in water and electricity for the extreme poor in rural areas. Progress in sanitation has improved much less" (47). B. Structure, correlates and trends in income poverty - "Income poverty remains both broad and deep in 2002...This reflects high levels of inequality, with the bottom 20% of the population receiving just over 3% of total income, while the top 10% receive over 40%...the extreme poor...are more likely to live in rural households in which the breadwinner's main occupation is agriculture...and have primary education or less. Indigeneous groups suffer disproportionately from extreme poverty" (48-49). "Education is associated with a lower probability of being poor after controlling for other factors" (52). "Households in urban areas have an average 20% higherper capita income compared to those in rural areas...being
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