No abstract

No abstract

We introduce 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. For example, a one-third reduction in poverty severity from proxy-means test 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 undercoverage of the poor are particularly low. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2010.

Abstract:We propose a general cost-of-inequality approach that jointly integrates horizontal and vertical equity criteria in the assessment of poverty alleviation programs, with the strength of each criterion being captured through its own inequityaversion parameter. This contrasts with the assessment of poverty alleviation programs done with simple under-coverage and leakage ratios or with other methods that do not take into account the heterogeneity of the poor and that do not address directly the social benefits of achieving normative criteria. Our methodology is illustrated using Tunisia data and two alternative poverty alleviation policies. We find inter alia that the social ranking of commodity and socio-demographic targeting in Tunisia depends on the policymaker's comparative preference for vertical and horizontal equity.

This paper compares the poverty reduction impact of income sources, taxes and transfers across five OECD countries. Since the estimation of that impact can depend on the order in which the various income sources are introduced into the analysis, it is done by using the Shapley value. Estimates of the poverty reduction impact are presented in a normalized and un-normalized fashion, in order to take into into account the total as well as the per dollar impacts. The methodology is applied to data from the Luxembourg Income Study (LIS) database.