Poverty, Unemployment and Literacy
POVERTY, UNEMPLOYMENT and LITERACY
ECONOMETRICS PROJECT REPORT
S. No. Topics Page No.
1. Objective and Purpose of the Project 2
2. Theoretical Background 3
3. Contents of Analysis 4
4. Regression 5
5. Calculating Residual Sqaure for Heteroscedasticity 7
6. Multicollinearity 10
7. Concluding Remarks 13
OBJECTIVE
To ascertain if poverty is caused due to the persistent unemployment and varying literacy, i.e., to determine if poverty rate is only a function of unemployment rate and literacy rate.
PURPOSE OF THIS PROJECT AND TOPIC
We have taken a sample of 35 states and union territories of India. We took their poverty rates as the dependent variable(NSSO 209-10) and independent variables as unemployment rate and literacy rates(Census 2011)
The purpose was to see if unemployment and illiteracy were the prime factors that caused poverty in India. Since various policy measures have been adopted to eradicate poverty by way of encouraging literacy and job creation, our aim was, in a way, to study the effects of such policy measures as well.
THEORETICAL BACKGROUND
The poverty rate is defined as "The percent of the population living below the poverty line." The poverty line is the amount of money deemed necessary for a family (which could be defined as just one person) to live. That poverty line is determined by the federal government.
Poverty in India is widespread, with the nation estimated to have a third of the world's poor. In 2010, the World Bank reported that 32.7% of the total Indians fall below the international poverty line of US$ 1.25 per day (PPP) while 68.7% lives on less than US$ 2 per day.
Though many people care about the number of unemployed individuals, economists typically focus on the unemployment rate. This corrects for the normal increase in the number of people employed due to increases in population and increases in the labor force relative to the population. The
ECONOMETRICS PROJECT REPORT
S. No. Topics Page No.
1. Objective and Purpose of the Project 2
2. Theoretical Background 3
3. Contents of Analysis 4
4. Regression 5
5. Calculating Residual Sqaure for Heteroscedasticity 7
6. Multicollinearity 10
7. Concluding Remarks 13
OBJECTIVE
To ascertain if poverty is caused due to the persistent unemployment and varying literacy, i.e., to determine if poverty rate is only a function of unemployment rate and literacy rate.
PURPOSE OF THIS PROJECT AND TOPIC
We have taken a sample of 35 states and union territories of India. We took their poverty rates as the dependent variable(NSSO 209-10) and independent variables as unemployment rate and literacy rates(Census 2011)
The purpose was to see if unemployment and illiteracy were the prime factors that caused poverty in India. Since various policy measures have been adopted to eradicate poverty by way of encouraging literacy and job creation, our aim was, in a way, to study the effects of such policy measures as well.
THEORETICAL BACKGROUND
The poverty rate is defined as "The percent of the population living below the poverty line." The poverty line is the amount of money deemed necessary for a family (which could be defined as just one person) to live. That poverty line is determined by the federal government.
Poverty in India is widespread, with the nation estimated to have a third of the world's poor. In 2010, the World Bank reported that 32.7% of the total Indians fall below the international poverty line of US$ 1.25 per day (PPP) while 68.7% lives on less than US$ 2 per day.
Though many people care about the number of unemployed individuals, economists typically focus on the unemployment rate. This corrects for the normal increase in the number of people employed due to increases in population and increases in the labor force relative to the population. The