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On the Targeting and Redistributive Efficiencies of Alternative Transfer Instruments


  • David Coady
  • Emmanuel Skoufias


The distributional characteristic provides an attractive alternative to conventional approaches used to evaluate the targeting performance of transfer programs. We decompose it into two components that are useful both conceptually and empirically; one capturing the targeting efficiency of the instrument, the other its redistributive efficiency . The redistributive index can also be generalized for the purposes of evaluating the degree of progressivity in tax-benefit structures. For illustrative purposes, we present an empirical application of the distributional characteristic and its decomposition using Mexican data. The welfare gains from using categorical targeting and means testing reflect improvements in redistributive and targeting efficiency respectively. Copyright 2004 Blackwell Publishing Ltd.

Suggested Citation

  • David Coady & Emmanuel Skoufias, 2004. "On the Targeting and Redistributive Efficiencies of Alternative Transfer Instruments," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(1), pages 11-27, March.
  • Handle: RePEc:bla:revinw:v:50:y:2004:i:1:p:11-27

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    References listed on IDEAS

    1. Hoddinott, John & Haddad, Lawrence James & Besley, Tim & Adato, Michelle, 2001. "Participation and poverty reduction," FCND briefs 98, International Food Policy Research Institute (IFPRI).
    2. Menon, Purnima & Ruel, Marie T. & Morris, Saul Sutkover, 2000. "Socio-economic differentials in child stunting are consistently larger in urban than rural areas," FCND briefs 97, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Coady, David P. & Parker, Susan W., 2005. "Program participation under means-testing and self-selection targeting methods," FCND discussion papers 191, International Food Policy Research Institute (IFPRI).
    2. Christophe Muller, "undated". "Anti-Poverty Transfers without Riots in Tunisia," Discussion Papers 07/06, University of Nottingham, CREDIT.
    3. Skoufias, Emmanuel & Lindert, Kathy & Shapiro, Joseph, 2010. "Globalization and the Role of Public Transfers in Redistributing Income in Latin America and the Caribbean," World Development, Elsevier, vol. 38(6), pages 895-907, June.
    4. Diaz-Bonilla, Eugenio & Robinson, Sherman & Thomas, Marcelle, 2002. "On boxes, contents, and users," TMD discussion papers 82, International Food Policy Research Institute (IFPRI).
    5. Kakwani, Nanak & Neri, Marcelo Côrtes & Son, Hyun H., 2010. "Linkages Between Pro-Poor Growth, Social Programs and Labor Market: The Recent Brazilian Experience," World Development, Elsevier, vol. 38(6), pages 881-894, June.
    6. David Coady, 2006. "The Welfare Returns to Finer Targeting: The Case of The Progresa Program in Mexico," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(2), pages 217-239, May.
    7. Garcia-Diaz, Rocio & Sosa-Rub, Sandra G., 2011. "Analysis of the distributional impact of out-of-pocket health payments: Evidence from a public health insurance program for the poor in Mexico," Journal of Health Economics, Elsevier, vol. 30(4), pages 707-718, July.
    8. Nanak Kakwani & Marcelo Neri & Hyun H. Son, 2006. "Linkages between Pro-Poor Growth, Social Programmes and Labour Market: The Recent Brazilian Experience," Working Papers 26, International Policy Centre for Inclusive Growth.
    9. Chikako Yamauchi, 2010. "Community-Based Targeting and Initial Local Conditions: Evidence from Indonesia's IDT Program," Economic Development and Cultural Change, University of Chicago Press, vol. 59(1), pages 95-147, October.
    10. repec:spr:soinre:v:133:y:2017:i:3:d:10.1007_s11205-016-1405-3 is not listed on IDEAS
    11. Del Rey, Elena & Estevan, Fernanda, 2013. "Conditional cash transfers and education quality in the presence of credit constraints," Economics of Education Review, Elsevier, vol. 34(C), pages 76-84.
    12. Bah, Adama & Bazzi, Samuel & Sumarto, Sudarno & Tobias, Julia, 2014. "Finding the Poor vs. Measuring Their Poverty: Exploring the Drivers of Targeting Effectiveness in Indonesia," MPRA Paper 59759, University Library of Munich, Germany.
    13. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2005. "Poverty-dominant program reforms: the role of targeting and allocation rules," Journal of Development Economics, Elsevier, vol. 77(1), pages 53-73, June.
    14. Paul A. Dorosh & David Coady & Bart Minten, 2008. "Evaluating Alternative Approaches to Poverty Alleviation; Rice Tariffs Versus Targeted Transfers in Madagascar," IMF Working Papers 08/9, International Monetary Fund.
    15. David P. Coady & Susan W. Parker, 2009. "Targeting Performance under Self-selection and Administrative Targeting Methods," Economic Development and Cultural Change, University of Chicago Press, vol. 57(3), pages 559-587, April.
    16. Neri, Marcelo Cortes, 2008. "Income polices, income distribution, and the distribution of opportunities in Brazil," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 678, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    17. Mohamed Bakhshoodeh, 2013. "Proxy Means Tests for Targeting Subsidies Scheme in Iran," Working Papers 795, Economic Research Forum, revised Nov 2013.
    18. José Cuesta, 2006. "The distributive consequences of machismo : a simulation analysis of intra-household discrimination," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1065-1080.
    19. Brent Robert J., 2013. "A cost-benefit framework for evaluating conditional cash-transfer programs," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(2), pages 159-180, August.
    20. Christophe Muller & Sami Bibi, 2010. "Refining Targeting against Poverty Evidence from Tunisia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(3), pages 381-410, June.
    21. Alderman, Harold & Behrman, Jere R. & Tasneem, Afia, 2015. "The contribution of increased equity to the estimated social benefits from a transfer program: An illustration from PROGRESA:," IFPRI discussion papers 1475, International Food Policy Research Institute (IFPRI).
    22. Cuesta, Jose, 2006. "The distributive consequuences of machismo: A simulation analysis of intrahousehold allocation," MPRA Paper 11243, University Library of Munich, Germany.
    23. Skoufias, Emmanuel & Davis, Benjamin & de la Vega, Sergio, 2001. "Targeting the Poor in Mexico: An Evaluation of the Selection of Households into PROGRESA," World Development, Elsevier, vol. 29(10), pages 1769-1784, October.

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