help fi_fgp graph (beta version; please report bugs) Sean Higgins

Title

fi_fgp graph -- Graphs fiscal impoverishment (FI) and fiscal gains to the poor (FGP) curves from Higgins and Lustig (2016).

Syntax

fi_fgp graph varlist(min=2 max=2) [if] [in] [weight] [, options]

Produce results
headcount Produce results for FI and FGP headcounts

total Produce results for total FI and FGP

percapita Produce results for per capita FI and FGP

normalized Produce results for per capita FI and FGP normalized by the poverty line

kappa(real) Produce results for total FI and FGP scaled inputed real number

PPP conversion
ppp(real) PPP conversion factor (LCU per international $, consumption-based) from year of PPP (e.g., 2005 or 2011) to year of PPP; do not use PPP factor for year of household survey

cpibase(real) CPI of base year (i.e., year of PPP, usually 2005 or 2011)

cpisurvey(real) CPI of year of household survey

daily Indicates that variables are in daily currency

monthly Indicates that variables are in monthly currency

yearly Indicates that variables are in yearly currency (the default)

Level of Results
hhouse Indicates if the data set is at the household level

individ Indicates if the data set is at the individual level

DISPLAYInd Returns results at individual level if data set is at household level

hsize(varname) Number of members in the household
(should be used when each observation in the data set is a household)

Ignore missing values
ignoremissing Ignore any missing values of income concepts and fiscal interventions

Produce subset of results (if none specified, all produced)
headcount Produce results for FI and FGP headcounts

total Produce results for total FI and FGP

percapita Produce results for per capita FI and FGP

normalized Produce results for per capita FI and FGP normalized by the poverty line

Graphing options
precision(real) Increment for grid-based method to compute FI and FGP. (Default is $0.01 PPP per day.)

scheme(string) Set the graph scheme (help scheme; default is "s1mono")

path(string) The directory to save the graphs in

graphname(string) The prefix of the saved graph names (default is "fi")

twoway_options Any options documented in
[G] twoway_options

pweight allowed; see weights. Alternatively, weights can be specified using svyset.

Description

fi_fgp graph graphs the FI and FGP measures derived in Higgins and Lustig (2016). These measures
compare pre-fisc and post-fisc incomes. The order in which the incomes are called in the command
determines which type of income it represents, the first being the pre-fisc income and the second being
the post-fisc income. The measures include FI and FGP headcounts (where the denominator is the total
population); total FI and FGP (in dollars per day adjusted for purchasing power parity [PPP]); FI and
FGP per capita (in PPP dollars per day), where k=1/|S| and S is the set of individuals in society with
cardinality |S| (i.e. total FI or FGP is divided by the total population); normalized FI and FGP,
where k = 1/(|S|z) and z is the poverty line (i.e., per capita FI or FGP as a proportion of the poverty
line); FI and FGP scaled by some scalar kappa of the users choice. The ratio of fiscal impoverishment
over fiscal gains for the poor (FI/FGP) is automatically displayed unless the user indicates otherwise
with the option noratio or the user calls for headcount.

The poverty line in PPP dollars per day can be set using the z(real) option; the commonly-used poverty lines are $1.25, $2.50, and
$4 PPP. Local currency poverty lines can be entered as real numbers (for poverty lines that are fixed for the entire
population) and should be in the same units as the income concept variables (preferably local currency units
per year).

fi_fgp can convert local currency variables to PPP dollars, using the PPP conversion
factor given by ppp(real), the consumer price index (CPI) of the year of PPP (e.g., 2005 or
2011) given by cpibase(real), and the CPI of the year of the household
survey used in the analysis given by cpisurvey(real). The year of PPP, also called base year,
refers to the year of the International Comparison Program (ICP) that is being used, e.g. 2005 or 2011.
The survey year refers to the year of the household survey used in the analysis. If the year of PPP is
2005, the PPP conversion factor should be the "2005 PPP conversion factor, private consumption (LCU per
international $)" indicator from the World Bank's World Development Indicators (WDI). If the year of
PPP is 2011, use the "PPP conversion factor, private consumption (LCU per international $)" indicator
from WDI. The PPP conversion factor should convert from year of PPP to year of PPP. In other words,
when extracting the PPP conversion factor, it is possible to select any year; DO NOT select the year of
the survey, but rather the year that the ICP was conducted to compute PPP conversion factors (e.g.,
2005 or 2011). The base year (i.e., year of PPP) CPI, which can also be obtained from WDI, should match
the base year chosen for the PPP conversion factor. The survey year CPI should match the year of the
household survey. Finally, for the PPP conversion, the user can specify whether the original variables
are in local currency units per day (daily), per month (monthly), or per year
(yearly, the default assumption).

If the data set is at the household level (each observation is an household), the option hhouse
should be specified to indicate this to the program. In this scenario the variable with the size of each household
should be specified in the hsize(varname) option. If the user wants the results to be returned at the
individual level they must specify the displayind option, which will multiply the household sampling weights
with the household size. Therefore the user never needs to do this prior to running the programming. If the data set
is at the individual level, this should be specified with the individ option. If this is called with the
displayind a warning will be produced.

By default, fi_fgp does not allow income concept or fiscal intervention variables to have missing
values: if a household has 0 income for an income concept, receives 0 from a transfer or a subsidy,
or pays 0 of a tax, the household should have 0 rather than a missing value. If one of these variables has
missing values, the command will produce an error. For flexibility, however, the command includes an
ignoremissing option that will drop observations with missing values for any of these variables, thus
allowing the command to run even if there are missing values.

Negative incomes are allowed, but a warning is issued for each core income concept that
has negative values (or positive values when a fiscal intervention is stored as negative values). This is because
various measures are no longer well-behaved when negative values are included (for example, the Gini coefficient,
concentration coefficient, or squared poverty gap can exceed 1, and other desirable properties of these measures
when incomes are non-negative no longer hold when negative values are allowed).

The resulting graphs from fi_fgp graph are saved in the directory specified by the path(string) option
(or, by default, the current directory) with the file name `graphname'_`measure'_`y0'_to_`y1'.gph where
`graphname' is the prefix specified by graphname(string) (or "fi" by default),
`measure' is one of headcount, total, percapita, or normalized, `y0' is a letter representing the
pre-fisc income concept (either m or mp), and `y1' is a letter representing the post-fisc income
concept (either c or f). To produce a subtitle for the graph fi_fgp graph extracts the variable
labels from the two inputted incomes to create the subtitle "(pre-fisc income variable name) to (post-fisc income variable name)".
If the variables aren't labeled then it will use the variable names.

Examples

Locals for PPP conversion (obtained from WDI through the wbopendata command)

. local ppp = 1.5713184 // 2005 Brazilian reais per 2005 $ PPP

. local cpi = 95.203354 // CPI for Brazil for 2009

. local cpi05 = 79.560051 // CPI for Brazil for 2005

Individual-level data (each observation is an individual). Estimating the total FI and FGP.
Poverty line set to be 2.5 PPP $ per day.

. fi_fgp graph ym yc [pw=w] , z(2.5) individ total

Household-level data (each observation is a household). Estimating thr normalized FI
and FGP. Poverty line set to be 1.25 PPP $ per day.

. fi_fgp graph ym yf [pw=w] , z(1.25) hhouse normalized hs(hhsize)

Individual-level data (each observation is an individual). Estimating per capita FI and FGP. Poverty line set to be 4 PPP $ per day.

. fi_fgp graph ymp yc [pw=w] , z(4) individ perc

Saved results

Pending

Author

Sean Higgins, UC Berkeley, seanhiggins@berkeley.edu

References

Higgins, Sean and Nora Lustig. 2016. "Can a Poverty-Reducing and Progressive Tax and Transfer System Hurt the Poor?" Journal of Development Economics 122, 63-75.