Which statistical indicator is used to measure the depth of poverty by accounting for the extent to which individuals fall below the poverty line?​

Correct option is A

The correct answer is (A) Poverty Gap Index

Explanation:

• The Poverty Gap Index measures the depth of poverty by accounting for the extent to which individuals or households fall below the poverty line.
• It calculates the average shortfall of income or consumption from the poverty line, considering both the proportion of people below the poverty line and the extent to which they fall below it.
• This index provides a more nuanced understanding of poverty compared to the Headcount Ratio, as it reflects not only how many people are poor but also how far they are from the poverty line.

Information Booster:

• The Poverty Gap Index is a useful tool for policymakers to assess how much additional income is needed to bring the poor up to the poverty line.
• The index can also be expressed as a percentage of the poverty line, providing a measure of the intensity or depth of poverty in a given area.

Additional Knowledge:

(B) Dependency Ratio

• The Dependency Ratio measures the ratio of the dependent population (young and old) to the working-age population, but it does not directly measure poverty.

(C) Headcount Ratio

• The Headcount Ratio measures the proportion of people below the poverty line, but it does not account for how far individuals are below the poverty line, unlike the Poverty Gap Index.

(D) Gini Coefficient

• The Gini Coefficient measures income inequality within a population, but it is not specifically designed to measure poverty depth.