Comparing Effects of General Subsidies and Targeted Transfers on Poverty: Robustness Analysis Using Data Set from Tunisia

Sami Bibi (sami.bibi@icloud.com)

No 125, Working Papers from Economic Research Forum

Abstract: This paper starts by presenting a descriptive analysis of the effects of general food subsidies on poverty in Tunisia; as revealed by the household survey data for 1990. The analysis indicates that the poorest certainly take advantage of this system, but at the price of considerable leakages to the non-poor and a sizeable economic efficiency loss resulting from the relative price distortions. Further, non-parametric estimations suggest that there are no commodities predominantly consumed by the poor. This implies that a subsidy program is not an effective way to fight against poverty and so, it is unlikely to improve significantly the living standard of the less well-off members of society by restructuring the current program. We investigate then the impact on poverty of a more targeted transfer scheme, based on proxy means tests, using an appropriate econometric technique to model it. Simulations show that this design would be more effective in reducing poverty than general food subsidies. Dominance tests are also used to assess the likely effects of this reform on a wide range of poverty lines and poverty measures. The main result is that this design would first-order-dominate a food subsidies scheme within a range of poverty lines including all those estimated for Tunisia.

Pages: 15 pages
Date: 2001-06-09, Revised 2001-06-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published by The Economic Research Forum (ERF)

Downloads: (external link)
http://erf.org.eg/wp-content/uploads/2017/05/0125.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://erf.org.eg/wp-content/uploads/2017/05/0125.pdf [301 Moved Permanently]--> https://erf.org.eg/wp-content/uploads/2017/05/0125.pdf)
http://bit.ly/2rThAZz (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:0125

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel (nnabil@erf.org.eg).