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Focused Transfer Targeting against Poverty Evidence from Tunisia

  • Christophe MULLER and Sami BIBI

    (Université de Cergy-Pontoise, THEMA, F-95000 Cergy-Pontoise, France. Faculté des Sciences Economiques et de Gestion de Tunis (FSEGT) et Unité de Recherche en Econométrie Appliquée (URECA), Campus Universitaire, Bd. 7 Nov. El Manar 2092 Tunis, Tunisia; and PEP, Canada.)

This paper introduces a new methodology to target direct transfers against poverty. Our method is based on estimation methods that focus on the poor. Using data from Tunisia, we estimate ‘focused’ transfer schemes that highly improve anti-poverty targeting performances. Post-transfer poverty can be substantially reduced with the new estimation method. In terms of P2, the most popular axiomatically valid poverty indicator, a 30 percent reduction in poverty from transfer schemes based on OLS method to focused transfer schemes, requires only a few hours of computer work based on methods available on popular statistical packages. Finally, the obtained levels of under-coverage of the poor is so low that reforms based on ‘proxy-means’ focused transfer schemes are likely to avoid social unrest.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2008-37.

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Date of creation: 2008
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Handle: RePEc:ema:worpap:2008-37
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