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The Welfare Returns to Finer Targeting: The Case of The Progresa Program in Mexico

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  • David Coady

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Abstract

It is common in developing countries to attempt finer targeting of the benefits from social safety net programs through combining different targeting methods. We evaluate the returns to finer targeting in the context of the PROGRESA program in Mexico. This program is a prominent program in the literature reflecting the fact that it has been widely evaluated, is perceived to be well targeted, and has been used as a prototype for many other programs in the region and beyond. We also identify the relative incremental contribution of each targeting method to the overall targeting performance of the program. We find that geographic targeting dominates demographic targeting (based on linking transfer levels to demographic composition), which in turn dominates household proxy-means targeting. However, the contribution of proxy-means targeting increases substantially as the program expands into less marginal localities. Adjusting for incomplete take-up increases the targeting performance of the program only slightly. Copyright Springer Science + Business Media, Inc. 2006

Suggested Citation

  • 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.
  • Handle: RePEc:kap:itaxpf:v:13:y:2006:i:2:p:217-239
    DOI: 10.1007/s10797-006-4824-2
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    References listed on IDEAS

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    1. Hoddinott, John & Skoufias, Emmanuel, 2004. "The Impact of PROGRESA on Food Consumption," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 37-61, October.
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    6. Ravallion, M., 1992. "Poverty Comparisons - A Guide to Concepts and Methods," Papers 88, World Bank - Living Standards Measurement.
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    12. David Coady & Jean Drèze, 2002. "Commodity Taxation and Social Welfare: The Generalized Ramsey Rule," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(3), pages 295-316, May.
    13. Ravallion, Martin, 1994. "Measuring Social Welfare with and without Poverty Lines," American Economic Review, American Economic Association, vol. 84(2), pages 359-364, May.
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    Citations

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    Cited by:

    1. John A. Maluccio, 2009. "Household targeting in practice: The Nicaraguan Red de Protección Social," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 1-23.
    2. Andrés Camilo ÁLVAREZ-ESPINOSA & Daniel Alejandro ORDOÑEZ & Alejandro NIETO & William WILLS & German ROMERO & Silvia Liliana CALDERÓN, 2015. "Compromiso de Reducción de Emisiones de Gases de Efecto Invernadero: Consecuencias económicas," ARCHIVOS DE ECONOMÍA 014157, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    3. Lang, Corey & Barrett, Christopher B. & Naschold, Felix, 2013. "Targeting Maps: An Asset-Based Approach to Geographic Targeting," World Development, Elsevier, vol. 41(C), pages 232-244.
    4. 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.
    5. 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.
    6. David Coady & Susan Parker, 2009. "Targeting Social Transfers to the Poor in Mexico," IMF Working Papers 09/60, International Monetary Fund.

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