EconPapers    
Economics at your fingertips  
 

The impact of credit on income poverty in urban Mexico

Miguel Niño-Zarazúa ()

No 2007005, Working Papers from The University of Sheffield, Department of Economics

Abstract: In recent years, an important number of impact studies have attempted to examine the effect of credit on income poverty; however, many of these studies have not paid sufficient attention to the problems of endogeneity and selection bias. The few exceptional cases have employed econometric techniques that work at the village level. The problem is that the concept of village is inappropriate in the urban context where a large percentage of microfinance organisations in the developing world actually operate. This paper presents an econometric approach which controls for endogeneity and self-selection using data from a quasi-experiment designed at the household level, and conducted in three urban settlements in the surroundings of the Metropolitan area of Mexico City. The paper provides an estimation of the impact of credit, employing different equivalence scales in order to measure the sensitivity of the poverty impact to the intra-household distribution of welfare. We find a link between poverty impacts and lending technology. Group-based lending programmes are more effective in reducing the poverty gap but in doing so, they achieve insignificant impacts on the poverty incidence. By contrast, individual lending programmes reported significant and small impacts at the upper limits of deprivation but insignificant impacts on the poverty gap.

Keywords: endogeneity; selection bias; microfinance; credit; income poverty; impact analysis; Mexico (search for similar items in EconPapers)
JEL-codes: C24 C81 O16 O17 O18 O19 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2007-03, Revised 2007-03
New Economics Papers: this item is included in nep-mfd and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.shef.ac.uk/content/1/c6/06/69/24/SERP2007005.pdf First version, 2007 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.shef.ac.uk/content/1/c6/06/69/24/SERP2007005.pdf [301 Moved Permanently]--> https://www.sheffield.ac.uk/content/1/c6/06/69/24/SERP2007005.pdf)
http://www.shef.ac.uk/content/1/c6/06/69/24/SERP2007005.pdf Revised version, 2007 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.shef.ac.uk/content/1/c6/06/69/24/SERP2007005.pdf [301 Moved Permanently]--> https://www.sheffield.ac.uk/content/1/c6/06/69/24/SERP2007005.pdf)

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:shf:wpaper:2007005

Access Statistics for this paper

More papers in Working Papers from The University of Sheffield, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Jacob Holmes ().

 
Page updated 2020-09-24
Handle: RePEc:shf:wpaper:2007005