A Poor Means Test? Econometric Targeting in Africa
55 Pages Posted: 14 Dec 2016 Last revised: 27 Apr 2018
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A Poor Means Test? Econometric Targeting in Africa
A Poor Means Test? Econometric Targeting in Africa
Date Written: December 13, 2016
Abstract
Proxy-means testing is a popular method of poverty targeting with imperfect information. In a now widely-used version, a regression for log consumption calibrates a proxy-means test score based on chosen covariates, which is then implemented for targeting out-of-sample. In this paper, the performance of various proxy-means testing methods is assessed using data for nine African countries. Standard proxy-means testing helps filter out the nonpoor, but excludes many poor people, thus diminishing the impact on poverty. Some methodological changes perform better, with a poverty-quantile method dominating in most cases. Even so, either a basic-income scheme or transfers using a simple demographic scorecard are found to do as well, or almost as well, in reducing poverty. However, even with a budget sufficient to eliminate poverty with full information, none of these targeting methods brings the poverty rate below about three-quarters of its initial value. The prevailing methods are particularly deficient in reaching the poorest.
Keywords: Inequality, Access of Poor to Social Services, Economic Assistance, Services & Transfers to Poor, Disability, Social Protections & Assistance, Poverty Diagnostics, Poverty Assessment, Poverty Lines, Poverty Monitoring & Analysis, Small Area Estimation Poverty Mapping, Poverty Impact Evaluation, Employment and Shared Growth
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