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Picking the Poor: Indicators for Geographic Targeting in Peru

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  • Schady, Norbert R

Abstract

Geographic targeting is perhaps the most popular mechanism used to direct social programs to the poor in Latin America. This paper empirically compares geographic targeting indicators available in Peru. To this effect, I combine household-level information from the 1997 Peru Living Standards Measurement Survey (LSMS) and district-level information from the 1993 Peru Population and Housing Census. I then conduct a series of simulations which estimate leakage rates, concentration curves, the impact of transfers on poverty as measured by the headcount index, poverty gap and P[subscript 2] measures of the FGT family, and non-parametric (kernel) densities when transfers are based on alternative indicators. I conclude that there is substantial potential for geographic targeting in Peru. However, the differences in outcomes across geographic targeting indicators are small, and are not statistically significant. These results are in keeping with earlier work which suggests that (among reasonable alternatives) the choice of geographic targeting indicator does not have an important bearing on poverty outcomes, and are at odds with more recent research which stresses the advantage of poverty maps which "impute" consumption or income. Copyright 2002 by The International Association for Research in Income and Wealth.

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Article provided by International Association for Research in Income and Wealth in its journal Review of Income & Wealth.

Volume (Year): 48 (2002)
Issue (Month): 3 (September)
Pages: 417-33

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Handle: RePEc:bla:revinw:v:48:y:2002:i:3:p:417-33

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  1. Ravallion, Martin & Sen, Binayak & DEC, 1994. "How land-based targeting affects rural poverty," Policy Research Working Paper Series 1270, The World Bank.
  2. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
  3. Besley, Timothy & Kanbur, Ravi, 1990. "The principles of targeting," Policy Research Working Paper Series 385, The World Bank.
  4. Datt, Gaurav & Ravallion, Martin, 1990. "Regional disparities, targeting, and poverty in India," Policy Research Working Paper Series 375, The World Bank.
  5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  6. Hoff, Karla, 2008. "Joseph E. Stiglitz," Policy Research Working Paper Series 4478, The World Bank.
  7. Ravallion, M., 1992. "Poverty Comparisons - A Guide to Concepts and Methods," Papers 88, World Bank - Living Standards Measurement.
  8. Hentschel, Jesko & Lanjouw, Jean Olson & Lanjouw, Peter & Poggi, Javier, 1998. "Combining census and survey data to study spatial dimensions of poverty," Policy Research Working Paper Series 1928, The World Bank.
  9. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Labor Supply and Targeting in Poverty Alleviation Programs," World Bank Economic Review, World Bank Group, vol. 8(2), pages 191-211, May.
  10. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, vol. 53(3), pages 367-394, March.
  11. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
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