Proxy Means Testing Vulnerability to Measurement Errors?

Jules Gazeaud

Journal of Development Studies, 2020, vol. 56, issue 11, 2113-2133

Abstract: Proxy Means Testing (PMT) is a popular method to target the poor in developing countries. PMT usually relies on survey-based consumption data and assumes random measurement errors – an assumption that has been challenged by recent literature. Using a survey experiment conducted in Tanzania, this paper brings causal evidence on the impact of non-random errors on PMT performances. Results show that non-random errors bias the coefficients from PMT models, resulting in a 5 to 27 per cent reduction in PMT predictive performances. Moreover, non-random errors induce a 10 to 34 per cent increase in the incidence of targeting errors when poverty is defined in absolute terms. More reassuringly, impacts on the ranking of households are smaller and essentially non-significant. Taken together, these results indicate that PMT performances are quite vulnerable to non-random errors when the objective is to target absolutely poor households, but remain largely unaffected when the objective is to target a fixed share of the population.

Date: 2020
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Related works:
Working Paper: Proxy Means Testing Vulnerability to Measurement Errors ? (2020)
Working Paper: Proxy Means Testing vulnerability to measurement errors? (2018)
Working Paper: Proxy Means Testing vulnerability to measurement errors? (2018)
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DOI: 10.1080/00220388.2020.1715942

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