Targeting the Poor: Evidence from a Field Experiment in Indonesia

55 Pages Posted: 17 May 2010 Last revised: 1 Sep 2010

See all articles by Vivi Alatas

Vivi Alatas

World Bank - Jakarta

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics

Rema Hanna

Harvard University - Harvard Kennedy School (HKS)

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Society of Fellows

Julia Tobias

Stanford University

Date Written: May 2010

Abstract

In developing countries, identifying the poor for redistribution or social insurance is challenging because the government lacks information about people's incomes. This paper reports the results of a field experiment conducted in 640 Indonesian villages that investigated two main approaches to solving this problem: proxy-means tests, where a census of hard-to-hide assets is used to predict consumption, and community-based targeting, where villagers rank everyone on a scale from richest to poorest. When poverty is defined using per-capita expenditure and the common PPP$2 per day threshold, we find that community-based targeting performs worse in identifying the poor than proxy-means tests, particularly near the threshold. This worse performance does not appear to be due to elite capture. Instead, communities appear to be using a different concept of poverty: the results of community-based methods are more correlated with how individual community members rank each other and with villagers' self-assessments of their own status than per-capita expenditure. Consistent with this, the community-based methods result in higher satisfaction with beneficiary lists and the targeting process.

Suggested Citation

Alatas, Vivi and Banerjee, Abhijit V. and Hanna, Rema and Olken, Benjamin A. and Tobias, Julia, Targeting the Poor: Evidence from a Field Experiment in Indonesia (May 2010). NBER Working Paper No. w15980. Available at SSRN: https://ssrn.com/abstract=1607470

Vivi Alatas (Contact Author)

World Bank - Jakarta ( email )

Jakarta Stock Exchange Bldg. Tower 2, 12th Floor
Jl. Jend. Sudirman Kav. 52-53
Jakarta, 12190
Indonesia

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-252D
Cambridge, MA 02142
United States
617-253-8855 (Phone)
617-253-6915 (Fax)

Rema Hanna

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Benjamin A. Olken

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
617-253-6833 (Phone)
617-253-1330 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-588-1407 (Phone)

Harvard University - Society of Fellows

Cambridge, MA 02138
United States

Julia Tobias

Stanford University ( email )

Stanford, CA 94305
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
48
Abstract Views
864
PlumX Metrics