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Targeting Performance under Self-selection and Administrative Targeting Methods

  • David P. Coady
  • Susan W. Parker

We evaluate the contributions of self-selection and administrative targeting to program targeting performance using unique household survey data collected for the evaluation of a Mexican social program that has acted as a regional prototype. Both forms of targeting improve targeting performance, but administrative selection based on proxy-means testing plays a crucial role in reducing total program coverage (to meet a budget constraint) while maintaining high coverage among the lowest income groups. Its importance is reinforced when existing knowledge barriers to participation are addressed, reflecting the high application rates among higher-income groups conditional on knowledge. Differentiating transfers based on household demographics also substantially improves targeting performance reflecting the linking of transfers to the number of children. Although expansion of the program to reduce the remaining undercoverage is likely to come at the expense of targeting performance, this trade-off can be reduced by improving the underlying proxy-means algorithm and linking transfer levels directly to proxy-means scores. The latter should also improve the contribution of self-selection to targeting performance. (c) 2009 by The University of Chicago. All rights reserved.

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File URL: http://dx.doi.org/10.1086/596615
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Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 57 (2009)
Issue (Month): 3 (04)
Pages: 559-587

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Handle: RePEc:ucp:ecdecc:v:57:y:2009:i:3:p:559-587
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  1. Heckman, James J & Smith, Jeffrey A., 2003. "The determinants of participation in a social program: Evidence from a prototypical job training program," Working Paper Series 2003:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. David P. Coady & Rebecca L. Harris, 2004. "Evaluating transfer programmes within a general equilibrium framework," Economic Journal, Royal Economic Society, vol. 114(498), pages 778-799, October.
  3. Stephen Pudney & Monica Hernandez & Ruth Hancock, 2002. "The Welfare Cost of Means-Testing: Pensioner Participation in Income Support," Discussion Papers in Economics 03/2, Department of Economics, University of Leicester.
  4. Deaton, A. & Paxson, C., 1997. "Economies of Scale, Household Size, and the Demand for Food," Papers 178, Princeton, Woodrow Wilson School - Development Studies.
  5. 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, 03.
  6. Lanjouw, Peter & Ravallion, Martin & DEC, 1994. "Poverty and household size," Policy Research Working Paper Series 1332, The World Bank.
  7. Duclos, Jean-Yves, 1995. "Modelling the take-up of state support," Journal of Public Economics, Elsevier, vol. 58(3), pages 391-415, November.
  8. 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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