In this assignment, you will formulate and evaluate a hypothesis regarding how GDP per capita and poverty are related. To do this, you will find and analyze data on the poverty rate at $1.90/day, $3.20/day, and $5.50/day for China and India

In this assignment, you will formulate and evaluate a hypothesis regarding how GDP per capita and poverty are related. To do this, you will find and analyze data on the poverty rate at $1.90/day, $3.20/day, and $5.50/day for China and India. You will compare the countries and try to explain the reasons behind the differences between them.

Datasets:

World Bank World Development Indicators

http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators

Background data collection and analysis:

1. Download data on the poverty rate at $1.90/day, $3.20/day, and $5.50/day for China and India for the earliest year available (1990 for China, 1977 for India) and the latest year available (2016 for China, 2011 for India). Use the series Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population), Poverty headcount ratio at $3.20 a day (2011 PPP) (% of population), and Poverty headcount ratio at $5.50 a day (2011 PPP) (% of population).

2. Download GDP per capita for the same years as the poverty data (use GDP per capita (constant 2010 US$)).

3. For China and India separately, calculate the correlation coefficient between GDP per capita and each measure of poverty.

4. Ravallion (2010) calculates the growth elasticity of poverty reduction. Calculate this variable for both China and India by dividing the percentage change in the poverty rate (over the longest period available) by the percentage change in per-capita GDP over the same period. Do this calculation using the $1.90/day poverty rate, the $3.20/day poverty rate, and the $5.50/day poverty rate. Measure the percentage changes using the compound annual growth rate (CAGR) formula given in Assignment 1.

Essay:

In your essay, clearly explain your hypothesis regarding how poverty and GDP per capita are related. Describe the changes over time in poverty in China and India; compare the two countries to each other, and discuss the reasons why you believe these countries have experienced these changes over time. What government policies does Ravallion (2010) identify that have affected poverty in China and India? What does the growth elasticity of poverty reduction tell us?

Detailed Instructions:

Your essay must have a title, an introduction, and a conclusion. Make sure to integrate all relevant definitions into your essay, and provide appropriate background information. A suggested essay structure contains five paragraphs:

• a first paragraph that briefly introduces the hypothesis you propose;
• a second paragraph describing how the various poverty rates have changed over time;
• a third paragraph describing how the poverty rate is related to GDP per capita;
• a fourth paragraph describing the growth elasticity of poverty reduction and the policies described by Ravallion;
• and a fifth, concluding, paragraph that briefly summarizes your hypothesis and arguments.

The maximum length is 500 words; include a word count at the end of your submission. Include the grading rubric as the first page of your submission. Write in 12-point font, double-spaced, with one-inch margins. Provide a bibliography listing the references you use, including your data sources and, if relevant, the class PowerPoints. Please note that your assignment will be submitted to anti-plagiarism software.

Include your Excel spreadsheet as an attachment in your submission. Your Excel spreadsheet should include all of your data and calculations. Required charts and figures should be placed into the body of your essay; any supplemental charts and figures may be placed in an appendix at the end of your essay.

Penalties:

• Late submissions: -10 points out of 50 points per day, starting immediately after 8:00 p.m. (i.e., an assignment submitted at 8:01 p.m. will be docked 10 points).
• No rubric: -1 point.
• No Excel spreadsheet: -2 points.
• No word count: -2 points.
• Over 500 words: -1 point for each additional 50 words (e.g., -1 for 501 words, -2 for 551 words, etc).