Optimal Income Support Targeting
AbstractThis paper considers the practical problem of distributing a fixed budget for poverty alleviation to a population whose poverty status is not directly observable. Some information on the relationship between poverty status and a number of observable and verifiable characteristics is assumed to be available in the form of a household survey. The solution we propose differs from other academic work in that it explicitly accounts for administrative constraints on the shape of the transfer function and is computationally more straightforward. It 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. Although the superiority of our allocation rule over other techniques is tautological, we explore the magnitude of the improvement in an artificial dataset. Finally, we provide an intuitive discussion of the defects of currently operational methods.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 9941.
Length: 24 pages
Date of creation: 2000
Date of revision:
POVERTY ; POPULATION ; INCOME;
Other versions of this item:
- Stefan De Wachter & Sebastian Galiani, 2000. "Optimal Income Support Targeting," Economics Series Working Papers 41, University of Oxford, Department of Economics.
- Sebastian Galiani & Stefan De Wachter, 2001. "Optimal Income Support Targeting," Working Papers 39, Universidad de San Andres, Departamento de Economia, revised Apr 2005.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Glewwe, Paul, 1992. "Targeting assistance to the poor : Efficient allocation of transfers when household income is not observed," Journal of Development Economics, Elsevier, vol. 38(2), pages 297-321, April.
- Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-77, May.
- Hettich, Walter & Winer, Stanley L, 1988. "Economic and Political Foundations of Tax Structure," American Economic Review, American Economic Association, vol. 78(4), pages 701-12, September.
- Ravallion, Martin & Sen, Binayak, 1994. "Impacts on rural poverty of land-based targeting: Further results for Bangladesh," World Development, Elsevier, vol. 22(6), pages 823-838, June.
- 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.
- Chesher, Andrew & Schluter, Christian, 2002.
"Welfare Measurement and Measurement Error,"
Review of Economic Studies,
Wiley Blackwell, vol. 69(2), pages 357-78, April.
- Ravallion, Martin & Chao, Kalvin, 1989. "Targeted policies for poverty alleviation under imperfect information: Algorithms and applications," Journal of Policy Modeling, Elsevier, vol. 11(2), pages 213-224.
- 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.
- Kanbur, R. & Keen, M., 1988. "Poverty, Incentives And Linear Income Taxation," The Warwick Economics Research Paper Series (TWERPS) 298, University of Warwick, Department of Economics.
- Datt, Gaurav & Ravallion, Martin, 1990. "Regional disparities, targeting, and poverty in India," Policy Research Working Paper Series 375, The World Bank.
- Elbers, Chris & Lanjouw, Jean O. & Lanjouw, Peter, 2002. "Micro-level estimation of welfare," Policy Research Working Paper Series 2911, The World Bank.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Besley, Timothy J & Kanbur, S M Ravi, 1988. "Food Subsidies and Poverty Alleviation," Economic Journal, Royal Economic Society, vol. 98(392), pages 701-19, September.
- Sebastian Galiani & Patrick J. McEwan, 2013.
"The Heterogeneous Impact of Conditional Cash Transfers,"
CEDLAS, Working Papers
0149, CEDLAS, Universidad Nacional de La Plata.
- Galiani, Sebastian & McEwan, Patrick J., 2013. "The heterogeneous impact of conditional cash transfers," Journal of Public Economics, Elsevier, vol. 103(C), pages 85-96.
- World Bank, 2001. "Household Risk, Self-Insurance and Coping Strategies in Urban Argentina," World Bank Other Operational Studies 15467, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise).
If references are entirely missing, you can add them using this form.