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Benefit incidence analysis, needs and demography. Measurement issues and an empirical study for Kenya

  • Isis Gaddis

    (Georg-August-University Göttingen)

  • Lionel Demery

Benefit incidence analysis is an extremely popular tool to assess the distribution of benefits from government expenditure in developing countries, particularly in the social sectors. The analysis describes the welfare impact of public spending on groups of people or households, typically along the income distribution. While benefit incidence analysis has generated useful insights into the distribution of benefits from public spending in a variety of sectors, many studies fail to take into account differences in needs for public services across population groups. This can lead to an inappropriate and potentially misleading assessment of equity in public spending. This article reviews the evidence and introduces techniques to account better for heterogeneous needs in benefit incidence analysis. Using the example of an empirical benefit incidence study of education expenditure in Kenya, we show that our understanding of the distributional implications of public spending is greatly improved if we account for demographic differences between population groups.

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File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_122.pdf
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Paper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 122.

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Date of creation: 21 Aug 2012
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Handle: RePEc:got:gotcrc:122
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  1. Tessa Bold, Mwangi Kimenyi, Germano Mwabu, Justin Sandefur, 2011. " Why Did Abolishing Fees Not Increase Public School Enrollment in Kenya?- Working Paper 271," Working Papers 271, Center for Global Development.
  2. Sahn, David E & Younger, Stephen D & Simler, Kenneth R, 2000. "Dominance Testing of Transfers in Romania," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 309-27, September.
  3. Abdelkrim Araar, 2006. "Poverty, Inequality and Stochastic Dominance, Theory and Practice: Illustration with Burkina Faso Surveys," Cahiers de recherche 0634, CIRPEE.
  4. Owen O'Donnell & Eddy van Doorslaer & Adam Wagstaff & Magnus Lindelow, 2008. "Analyzing Health Equity Using Household Survey Data : A Guide to Techniques and Their Implementation," World Bank Publications, The World Bank, number 6896, September.
  5. Rodrigo Cubero & Ivanna Vladkova Hollar, 2010. "Equity and Fiscal Policy; The Income Distribution Effects of Taxation and Social Spending in Central America," IMF Working Papers 10/112, International Monetary Fund.
  6. Jonathan Haughton & Shahidur R. Khandker, 2009. "Handbook on Poverty and Inequality," World Bank Publications, The World Bank, number 11985, September.
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