Picking the Poor : Indicators for Geographic Targeting in Peru

Geographic targeting is perhaps the most
popular mechanism used to direct social programs to the poor
in Latin America. The author 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 [poverty] measures of the
Foster-Greer-Thorbecke family; and nonparametric (kernal)
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.