Poverty Mapping Based on Local Perceptions
Martin Wiegand (VU University Amsterdam)
Abstract: This paper shows how local perceptions of poverty can be extrapolated. The technique parallels the classical World Bank method of poverty mapping, but utilises the orderings of participatory wealth rankings instead of consumption to relate well-being and household characteristics. Using data from a field experiment in Indonesia, it is demonstrated how the resulting new poverty map can help to improve targeting in a decentralised antipoverty program. When the new poverty map instead of a consumption-based one is used to derive the optimal allocation of benefits, the expected number of mis-targeted households according to local poverty perceptions can be reduced by around two thirds.
The Dilemma of Reducing Labour Income Risk
Swapnil Singh (University of Amsterdam)
Abstract: I document that after taxes and transfers, labour income risk of single individual households is about 13 percent higher as compared to married households. Question is, should government introduce more public insurance through higher progressive taxation to reduce the post taxes labour income risk of single households? In standard incomplete markets model, higher progressive taxation for single individual households improves the allocation of risk. However due to general equilibrium effects, the ex-ante welfare of the single individual households decreases while that of married households increases.