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

Author

Listed:
  • Isis Gaddis

    (Georg-August-University Göttingen)

  • Lionel Demery

Abstract

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.

Suggested Citation

  • Isis Gaddis & Lionel Demery, 2012. "Benefit incidence analysis, needs and demography. Measurement issues and an empirical study for Kenya," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 122, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:122
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_122.pdf
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    References listed on IDEAS

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    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.
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    Cited by:

    1. Dossè M. Djahini-afawoubo, 2016. "Public spending on education in Togo: Does the poor benefit?," Economics Bulletin, AccessEcon, vol. 36(4), pages 2137-2147.

    More about this item

    Keywords

    Benefit incidence; public spending; education; demography; population-normalization; stochastic dominance; Kenya;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I2 - Health, Education, and Welfare - - Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • H4 - Public Economics - - Publicly Provided Goods

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