Passage

Directions: Consider the following table that gives the monthly per capita consumption expenditure (MPCE) of eight households and answer the question. TABLE State MPCE (in Rs.) of 8 Households 1 2 3 4 5 6 7 8 State-A 950 1100 1000 975 750 775 790 1400 State-B 1250 1150 1400 1100 550 600 490 1200 The value of Z (poverty line MPCE cut off) is Rs. 800.

From the table, calculate the estimates of Square Poverty Gap Ratio (SPGR) and then show that the SPGR in State-A is

The Square Poverty Gap Ratio is found by summing the squares of the shortfalls of the poor from the poverty line Z, then dividing by the total population times Z squared. For State-A, the shortfalls are 50, 25, and 10, so the sum of their squares is 2500 + 625 + 100 = 3225. For State-B, the shortfalls are 250, 200, and 310, and the sum of their squares is 62500 + 40000 + 96100 = 198600. Because 198600 is significantly larger than 3225, dividing both by the same constant shows that the SPGR in State-A is lower than that in State-B.

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