Optimal Anti‐Poverty Programmes: Horizontal Equity and the Paradox of Targeting

Udo Ebert

Economica, 2005, vol. 72, issue 287, 453-468

Abstract: The paper examines the problem of optimal targeting when households differ in needs. Additively decomposable poverty measures based on the households' deprivation are employed. Needs are modelled carefully: household size and needs are reflected by equivalence scales and weights. The paradox of targeting corresponds to a situation in which the benefits given to a household type could decrease if the type's needs measured by the respective scale value are increased. I find that poverty programmes are horizontally equitable if and only if the weight attached to each household type equals the respective equivalence scale value. The paradox cannot then occur, either.

Date: 2005
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