Optimal Income Support Targeting
27 Pages Posted: 14 Feb 2012
Date Written: February 12, 2012
Abstract
This paper considers the practical problem of distributing a fixed budget for poverty alleviation to a population whose poverty status is not directly observable. The solution we propose improves on the techniques that are commonly used in practice by taking both the concavity of the social welfare function and the entire conditional distribution of poverty status into account, and by endogenously determining the optimal transfer levels. We provide an algorithm to calculate the optimal transfers for any population of benefit applicants. Finally, we explain how our method is a generalization of statistical classification techniques and thus provide an intuitive discussion of the defects of currently operational methods.
Keywords: classification, poverty, program design, targeting
JEL Classification: H2, C4
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Micro-Level Estimation of Welfare
By Peter F. Lanjouw, Jean O. Lanjouw, ...
-
Combining Census and Survey Data to Study Spatial Dimensions of Poverty a Case Study of Ecuador
By Peter F. Lanjouw and Jesko Hentschel
-
Crime and Local Inequality in South Africa
By Gabriel Demombynes and Berk Ozler
-
Picking the Poor: Indicators for Geographic Targeting in Peru
-
Poverty Comparisons with Noncompatible Data: Theory and Illustrations
By Jean O. Lanjouw and Peter F. Lanjouw
-
On the Unequal Inequality of Poor Communities
By Chris Elbers, Peter F. Lanjouw, ...
-
Poverty Alleviation Through Geographic Targeting: How Much Does Disaggregation Help?
By Chris Elbers, Tomoki Fujii, ...
-
Do School Facilities Matter? The Case of the Peruvian Social Fund (Foncodes)