r.fgt: Convex measure of affluence
In affluenceIndex: Affluence Indices

Description Usage Arguments Details Value Author(s) References Examples

Computes measure of affluence analogous to the convex version of Foster, Greer and Thorbecke (1984) family of poverty indices.

1	r.fgt(x, k, alpha)

`x`	the income vector
`k`	multiple of the median income
`alpha`	parameter of the index: `alpha` > 1

Peichl et. al (2008) defined an affluence index

R_{α}^{FGT,T2}(\mathbf{x},ρ)=\frac{1}{n} ∑_{i=1}^{n} ≤ft( ≤ft(\frac{x_i - ρ}{ρ} \right)_{+} \right)^{α},α>1,

where x_i is an income of individual i, n is the number of individuals, ρ is the richness line. Index satisfies transfer axiom T2 (convex): a richness index should decrease when a rank-preserving progressive transfer between two rich people takes place.

`r`	values of the sum in the index formula
`r.fgt`	the value of index

Alicja Wolny-Dominiak

1. Foster J.E., Greer J., Thorbecke E. (1984) A class of decomposable poverty measures. Econometrica, 52, pp. 761-766.
2. Peichl A., Schaefer T., Scheicher C. (2008) Measuring richness and poverty - A micro data application to Europe and Germany. IZA Discussion Paper No. 3790, Institute for the Study of Labor (IZA).