Targeting the Poor: Evidence from a Field Experiment in Indonesia

Hanna, Rema; Banerjee, Abhijit; Alatas, Vivi; Olken, Benjamin; Tobias, Julia (2012)


Hanna, Rema, Abhijit Banerjee, Vivi Alatas, Benjamin Olken, and Julia Tobias. 2012. “Targeting The Poor: Evidence From A Field Experiment In Indonesia”. American Economic Review : 1206-1240.
This paper reports an experiment in 640 Indonesian villages on three approaches to target the poor: proxy-means tests (PMT), where assets are used to predict consumption; community targeting, where villagers rank everyone from richest to poorest; and a hybrid. Defining poverty based on PPP$2 per-capita consumption, community targeting and the hybrid perform somewhat worse in identifying the poor than PMT, though not by enough to significantly affect poverty outcomes for a typical program. Elite capture does not explain these results. Instead, communities appear to apply a different concept of poverty. Consistent with this finding, community targeting results in higher satisfaction.