Working Paper: CEPR ID: DP9740
Authors: Dean S. Karlan; Bram Thuysbaert
Abstract: For policy purposes, it is important to understand the relative efficacy of various methods to target the poor. Recently, participatory methods have received particular attention. We ex-amine the effectiveness of a hybrid two-step process that combines a participatory wealth ranking and a verification household survey, relative to two proxy means tests (the Progress out of Poverty Index and a housing index), in Honduras and Peru. The methods we examine perform similarly to one another by various metrics. They all target most accurately in the cases of the poorest and the wealthiest households but perform with mixed results among households in the middle of the distribution. Ultimately, given similar performance, the analysis suggests that costs should be the driving consideration in choosing across methods.
Keywords: Participatory Wealth Rankings; Poverty Targeting; Proxy Means Tests
JEL Codes: C81; O12; O20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Participatory wealth ranking (PWR) (D31) | sorts households by welfare status (I38) |
| Verification survey (C83) | filters out wealthier households (G59) |
| Vulnerability to food consumption reductions (D18) | does not correlate with poverty rankings (I32) |
| Hybrid targeting process (TUP) (O36) | identifies the poorest households (I32) |
| Asset ownership (G32) | correlates with poverty rankings (I32) |
| Livestock (Q10) | correlates with poverty rankings (I32) |
| Education (I29) | correlates with poverty rankings (I32) |