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A poor means test? Econometric targeting in Africa

Caitlin Brown (), Martin Ravallion () and Dominique van de Walle ()

Journal of Development Economics, 2018, vol. 134, issue C, 109-124

Abstract: Proxy-means tests (PMTs) are popular for poverty-targeting with imperfect information. In a widely-used version, a regression for log consumption calibrates a PMT score based on covariates, which is then implemented for targeting out-of-sample. The performance of various PMT methods is assessed using data for nine African countries. Standard PMTs help filter out the non-poor, but exclude many poor people, thus diminishing the impact on poverty. Poverty-focused econometric methods such as using quantile regression generally do better. We also characterize the optimal informationally-feasible solution for poverty targeting and compare it to econometric methods. Even with a budget sufficient to eliminate poverty with full information, none of the targeting methods studied bring the poverty rate below about three-quarters of its initial value. The prevailing methods are particularly deficient in reaching the poorest. A basic-income scheme or transfers using a simple demographic scorecard often do as well, or even better, in reducing poverty.

Keywords: Poverty; Cash transfers; Proxy means test; Targeting; Africa (search for similar items in EconPapers)
JEL-codes: I32 I38 (search for similar items in EconPapers)
Date: 2018
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Working Paper: A Poor Means Test? Econometric Targeting in Africa (2016) Downloads
Working Paper: A poor means test ? econometric targeting in Africa (2016) Downloads
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