Picking the Poor: Indicators for Geographic Targeting in Peru
24 Pages Posted: 20 Apr 2016
Date Written: November 1, 2000
A revised version was published as Picking the Poor: Indicators for Geographic Targeting in Peru. The Review of Income and Wealth 48 (3, September): 417-33, 2002.
Geographic targeting of social programs to the poor has become increasingly important in Peru. The potential payoffs of such targeting are large, and differences in outcomes with different targeting indicators are small.
Geographic targeting is perhaps the most popular mechanism used to direct social programs to the poor in Latin America.
Schady empirically compares geographic targeting indicators available in Peru. He combines household-level information from the 1994 and 1997 Peru Living Standards Measurement Surveys and district-level information from the 1993 Peru Population and Housing Census.
He then conducts a series of simulations that estimate leakage rates; concentration curves; the impact of transfers on poverty as measured by the headcount index, poverty gap, and P2 measures of the Foster-Greer-Thorbecke family; and nonparametric (kernel) densities when transfers are based on alternative indicators.
He concludes that there is substantial potential for geographic targeting in Peru. The differences in outcomes across geographic targeting indicators are small and not statistically significant.
This paper - a product of the Poverty Sector Unit, Latin America and the Caribbean Region - is part of a larger effort in the region to explore the potential of geographic targeting. The author may be contacted at firstname.lastname@example.org.
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