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The Distributional Impact of Fiscal Policy in Honduras
This paper uses household survey data to estimate the incidence of tax and spending programs in Honduras. Any such exercise is fraught with difficulty, so our simplifying assumptions are carefully explained. Rather than look at tax and spending completely independently, we evaluate net incidence of major programs-such as health care and pensions-to get a more holistic evaluation of redistribution. Our results show that fiscal policy is, on balance, progressive, but that there is room for significant improvement. In particular, energy subsidies, university education and public pension programs provide disproportionate benefits to higher-income households.
Estimating Small Area Population Density Using Survey Data and Satellite Imagery
Country-level census data are typically collected once every 10 years. However, conflict, migration, urbanization, and natural disasters can cause rapid shifts in local population patterns. This study uses Sri Lankan data to demonstrate the feasibility of a bottom-up method that combines household survey data with contemporaneous satellite imagery to track frequent changes in local population density. A Poisson regression model based on indicators derived from satellite data, selected using the least absolute shrinkage and selection operator, accurately predicts village-level population density. The model is estimated in villages sampled in the 2012/13 Household Income and Expenditure Survey...
Estimating Poverty in India Without Expenditure Data
This paper applies an innovative method to estimate poverty in India in the absence of recent expenditure data. The method utilizes expenditure data from 2004-05, 2009-10, and 2011-12 to impute household expenditure into a survey of durable goods expenditure conducted in 2014-15. At the USD 1.90 per day international poverty line, the preferred model predicts a 2014-15 head-count poverty rate of 10 percent in urban areas and 16.4 percent in rural areas, implying a poverty rate of 14.6 percent nationally. The implied poverty elasticity with respect to growth in per capita Gross Domestic Product (GDP) is within the range of past experience, and states with higher gross domestic product growth saw greater predicted poverty reductions. In validation tests, the model's predictions perform comparably to the World Bank's current adjustment method when predicting for 2011-12 but they are far more accurate when predicting for 2004-05. Three alternative specifications give moderately higher estimates of poverty. The results indicate that survey-to-survey imputation, when feasible, is a preferable alternative to the current method used to adjust survey-based poverty estimates to later years.
Who are the Poor in the Developing World?
This paper presents a new demographic profile of extreme and moderate poverty, defined as those living on less than $1.90 and between $1.90 and $3.10 per day in 2013, based on household survey data from 89 developing countries. The face of poverty is primarily rural and young; 80 percent of the extreme poor and 75 percent of the moderate poor live in rural areas. Over 45 percent of the extreme poor are children younger than 15 years old, and nearly 60 percent of the extreme poor live in households with three or more children. Gender differences in poverty rates are muted, and there is scant evidence of gender inequality in poor children's educational attainment. A sizable share of the extrem...
Distributional Implications of the VAT Reform in the Philippines
This paper assesses the distributional impact of the recent VAT reform in the Philippines and evaluates alternative methods to mitigate the effects of the reform on poor households. The reform was progressive and relatively well targeted. To alleviate the impact of the reform on the poor, several mitigating measures were introduced. Although these measures reduced the adverse impact of the VAT reform for all households, a sizable amount of the benefit accrued to high-income households. Targeted transfer schemes have the potential to deliver a much higher percentage of benefits to the poor
Integrating Survey and Geospatial Data to Identify the Poor and Vulnerable
Generating timely data to identify the poorest villages in developing countries remains a fundamental challenge for existing data systems. This paper investigates the accuracy of four alternative methods for predicting a measure of village economic welfare for approximately 4,500 villages in 10 poor Malawian districts: (1) proxy means test scores calculated from the 2017 social registry, (2) the Meta Relative Wealth Index, (3) predictions derived from a standard household survey and publicly available geospatial indicators, and (4) predictions derived from a two-step approach that first predicts welfare into a hypothetical partial registry of approximately 450 villages, and then predicts wel...
How Survey-to-Survey Imputation Can Fail
This paper proposes diagnostics to assess the accuracy of survey-to-survey imputation methods and applies them to examine why imputing from the Household Income and Expenditure Survey into the Labor Force Survey fails to accurately project poverty trends in Sri Lanka between 2006 and 2009. Survey-to-survey imputation methods rely on two key assumptions: (i) that the questions in the two surveys are asked in a consistent way and (ii) that common variables of the two surveys explain a large share of the intertemporal change in household expenditure and poverty. In addition, differences in sampling design can lead validation tests to underestimate the accuracy of survey-to-survey predictions. I...
The Persistence of Income Shocks
This paper estimates the persistence of transient income shocks to farm households in rural Indonesia. Persistence is defined as the elasticity of a household's 1997 household per capita income with respect to its 1993 per capita income, controlling for time-invariant characteristics of the household. Local rainfall levels are used as an exogenous source of transitory variation in 1993 income. Four main conclusions emerge. First, roughly 30% of household income shocks remain after four years. Second, the persistence of negative and positive shocks is approximately equal; if anything, positive shocks last longer. Third, neither positive nor negative income shocks disproportionately affect poor households. Finally, measurement error in income and unobserved household heterogeneity are important sources of bias. These findings cast doubt on common arguments advocating public intervention to stabilize or redistribute income, and suggest that anti-poverty policy should address more permanent causes of household poverty.
