A Poor Means Test?
Proxy-means testing is a popular method of poverty targeting with imperfect information. In a now widely-used version, a regression for log consumption calibrates a proxy-means test score based on chosen covariates, which is then implemented for targeting out-of-sample. In this paper, the performance of various proxy-means testing methods is assessed using data for nine African countries. Standard proxy-means testing helps filter out the nonpoor, but excludes many poor people, thus diminishing the impact on poverty. Some methodological changes perform better, with a poverty-quantile method dominating in most cases. Even so, either a basic-income scheme or transfers using a simple demographic scorecard are found to do as well, or almost as well, in reducing poverty. However, even with a budget sufficient to eliminate poverty with full information, none of these targeting methods brings the poverty rate below about three-quarters of its initial value. The prevailing methods are particularly deficient in reaching the poorest.
| Main Authors: | , , |
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| Format: | Working Paper biblioteca |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016-12
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| Subjects: | TARGETING OF SOCIAL TRANSFERS, PROXY MEANS TEST, SOCIAL PROTECTION, SOCIAL PROGRAMS, poverty, cash transfers, means test, targeting, |
| Online Access: | http://documents.worldbank.org/curated/en/484991481639919564/A-poor-means-test-econometric-targeting-in-Africa https://hdl.handle.net/10986/25814 |
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| Summary: | Proxy-means testing is a popular method
of poverty targeting with imperfect information. In a now
widely-used version, a regression for log consumption
calibrates a proxy-means test score based on chosen
covariates, which is then implemented for targeting
out-of-sample. In this paper, the performance of various
proxy-means testing methods is assessed using data for nine
African countries. Standard proxy-means testing helps filter
out the nonpoor, but excludes many poor people, thus
diminishing the impact on poverty. Some methodological
changes perform better, with a poverty-quantile method
dominating in most cases. Even so, either a basic-income
scheme or transfers using a simple demographic scorecard are
found to do as well, or almost as well, in reducing poverty.
However, even with a budget sufficient to eliminate poverty
with full information, none of these targeting methods
brings the poverty rate below about three-quarters of its
initial value. The prevailing methods are particularly
deficient in reaching the poorest. |
|---|