How can you calculate headcount index?

Answer 1

Take the amount of families below the poverty line and multiply it by how many people are in those families as the headcount index uses individuals not entire families to calculate to the index. Once you get the amount of individuals living in poverty you divide it by the total population.

Ex: 2000 Families of 2 have an income less than the poverty line.

4000 Families of 2 have an income over the poverty line.

2000 Families of 4 have an income less than poverty line.

4000 Families of 4 have an income over the poverty line.

First the number of individuals in poverty:

(2000 * 2) + (2000 * 4) =

(4000) + (8000) = 12,000

Then find the total population

(2000 * 2) + ( 4000 * 2) + (2000 * 4) + (4000 *4) = 36,000

12,000 / 36,000 = 33.33%

So the headcount here would show us that 1/3 of the total population is in poverty.