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Proxy Means Testing Vulnerability to Measurement Errors?

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  • Jules Gazeaud

Abstract

Proxy Means Testing (PMT) is a popular method to target the poor in developing countries. PMT usually relies on survey-based consumption data and assumes random measurement errors – an assumption that has been challenged by recent literature. Using a survey experiment conducted in Tanzania, this paper brings causal evidence on the impact of non-random errors on PMT performances. Results show that non-random errors bias the coefficients from PMT models, resulting in a 5 to 27 per cent reduction in PMT predictive performances. Moreover, non-random errors induce a 10 to 34 per cent increase in the incidence of targeting errors when poverty is defined in absolute terms. More reassuringly, impacts on the ranking of households are smaller and essentially non-significant. Taken together, these results indicate that PMT performances are quite vulnerable to non-random errors when the objective is to target absolutely poor households, but remain largely unaffected when the objective is to target a fixed share of the population.

Suggested Citation

  • Jules Gazeaud, 2020. "Proxy Means Testing Vulnerability to Measurement Errors?," Journal of Development Studies, Taylor & Francis Journals, vol. 56(11), pages 2113-2133, November.
    • Handle: RePEc:taf:jdevst:v:56:y:2020:i:11:p:2113-2133
    DOI: 10.1080/00220388.2020.1715942
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    Cited by:

    1. Ameye, Hannah & De Weerdt, Joachim & Gibson, John, 2021. "Measuring macro- and micronutrient consumption in multi-purpose surveys: Evidence from a survey experiment in Tanzania," Food Policy, Elsevier, vol. 102(C).
    2. repec:lic:licosd:41819 is not listed on IDEAS
    3. Thomas Pave Sohnesen & Peter Fisker & David Malmgren‐Hansen, 2022. "Using Satellite Data to Guide Urban Poverty Reduction," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S2), pages 282-294, December.
    4. Ligon, Ethan & Trachtman, Carly, 2024. "Assessing Targeting Peformance: The Case of Ghana’s LEAP Program," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2zk0m608, Department of Agricultural & Resource Economics, UC Berkeley.

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