This paper proposes a method for estimating distribution functions that are associated with the nested errors in linear mixed models. The estimator incorporates Empirical Bayes prediction while making minimal assumptions about the shape of the error distributions.
... See More + The application presented in this paper is the small area estimation of poverty and inequality, although this denotes by no means the only application. Monte-Carlo simulations show that estimates of poverty and inequality can be severely biased when the non-normality of the errors is ignored. The bias can be as high as 2 to 3 percent on a poverty rate of 20 to 30 percent. Most of this bias is resolved when using the proposed estimator. The approach is applicable to both survey-to-census and survey-to-survey prediction.
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Policy Research Working Paper WPS6962 JUL 01, 2014
This paper is organized in following headings: can we trust shoestring evaluations?; evaluation of development programs: randomized controlled trials or regressions?
... See More + ; effects of Colombia’s social protection system on workers’ choice between formal and informal employment; can conditional cash transfers compensate for a father’s absence? collective action and community development: evidence from self-help groups in rural India; excluding the rural population: the impact of public expenditure on child malnutrition in Peru; is small better? a comparison of the effect of large and small dams on cropland productivity in South Africa
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Can project evaluation methods be used to evaluate programs: complex interventions involving multiple activities? A program evaluation cannot be based simply on separate evaluations of its components if interactions between the activities are important.
... See More + In this paper a measure is presented, the total program effect (TPE), which is an extension of the average treatment effect on the treated (ATET). It explicitly takes into account that in the real world (with heterogeneous treatment effects) individual treatment effects and program assignment are often correlated. The TPE can also deal with the common situation in which such a correlation is the result of decisions on (intended) program participation not being taken centrally. In this context randomized controlled trials (RCTs) are less suitable even for the simplest interventions. The TPE can be estimated by applying regression techniques to observational data from a representative sample from the targeted population. The approach is illustrated with an evaluation of a health insurance program in Vietnam.
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Can project evaluation methods be used to evaluate programs: complex interventions involving multiple activities? A program evaluation cannot be based simply on separate evaluations of its components if interactions between the activities are important.
... See More + In this paper a measure is proposed, the total program effect (TPE), which is an extension of the average treatment effect on the treated (ATET). It explicitly takes into account that in the real world (with heterogeneous treatment effects) individual treatment effects and program assignment are often correlated. The TPE can also deal with the common situation in which such a correlation is the result of decisions on (intended) program participation not being taken centrally. In this context RCTs are less suitable even for the simplest interventions. The TPE can be estimated by applying regression techniques to observational data from a representative sample from the targeted population. The approach is illustrated with an evaluation of a health insurance program in Vietnam.
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Policy Research Working Paper WPS6587 SEP 01, 2013
The small-area estimation technique developed for producing poverty maps has been applied in a large number of developing countries. Opportunities to formally test the validity of this approach remain rare due to lack of appropriately detailed data.
... See More + This paper compares a set of predicted welfare estimates based on this methodology against their true values, in a setting where these true values are known. A recent study draws on Monte Carlo evidence to warn that the small-area estimation methodology could significantly over-state the precision of local-level estimates of poverty, if underlying assumptions of spatial homogeneity do not hold. Despite these concerns, the findings in this paper for the state of Minas Gerais, Brazil, indicate that the small-area estimation approach is able to produce estimates of welfare that line up quite closely to their true values. Although the setting considered here would seem, a priori, unlikely to meet the homogeneity conditions that have been argued to be essential for the method, confidence intervals for the poverty estimates also appear to be appropriate. However, this latter conclusion holds only after carefully controlling for community-level factors that are correlated with household level welfare.
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Policy Research Working Paper WPS4513 FEB 01, 2008
The authors examine the performance of small area welfare estimation. The method combines census and survey data to produce spatially disaggregated poverty and inequality estimates.
... See More + To test the method, they compare predicted welfare indicators for a set of target populations with their true values. They construct target populations using actual data from a census of households in a set of rural Mexican communities. They examine estimates along three criteria: accuracy of confidence intervals, bias, and correlation with true values. The authors find that while point estimates are very stable, the precision of the estimates varies with alternative simulation methods. While the original approach of numerical gradient estimation yields standard errors that seem appropriate, some computationally less-intensive simulation procedures yield confidence intervals that are slightly too narrow. The precision of estimates is shown to diminish markedly if unobserved location effects at the village level are not well captured in underlying consumption models. With well specified models there is only slight evidence of bias, but the authors show that bias increases if underlying models fail to capture latent location effects. Correlations between estimated and true welfare at the local level are highest for mean expenditure and poverty measures and lower for inequality measures.
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Policy Research Working Paper WPS4155 MAR 01, 2007
Demombynes, Gabriel; Elbers, Chris; Lanjouw, Jean O.; Lanjouw, PeterDisclosed
How exposure to risk affects economic growth is a key issue in development. This article quantifies both the ex ante and ex post effects of risk using long-running panel data for rural households in Zimbabwe.
... See More + It proposes a simulation-based econometric methodology to estimate the structural form of a micro model of household investment decisions under risk. The key finding is that risk substantially reduces growth in this particular setting: the mean capital stock in the sample is (in expectation) 46 percent lower than in the absence of risk. About two-thirds of the impact of risk is due to the ex ante effect (that is, the behavioral response to risk), which is usually not taken into account in policy design. These results suggest that policy interventions that reduce exposure to shocks or that help households manage risk could be much more effective than is commonly thought.
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Journal Article 77533 JAN 01, 2007
Elbers, Chris; Gunning, Jan Willem; Kinsey, BillDisclosed
This issue includes the following: growth and risk: methodology and micro evidence; by Chris Elbers, Jan Willem Gunning, and Bill Kinsey. Dollars, debt, and international financial institutions: dedollarizing multilateral lending; by Eduardo Levy Yeyati.
... See More + Business cycle synchronization and regional integration: a case study for Central America; by Norbert Fiess. Protecting the vulnerable: the tradeoff between risk reduction and public insurance; by Shantayanan Devarajan, and William Jack. The incidence of public spending on healthcare: comparative evidence from Asia; by Owen O'Donnell, Eddy van Doorslaer, Ravi P. Rannan-Eliya, Aparnaa Somanathan, Shiva Raj Adhikari, Deni Harbianto, Charu C. Garg, Piya Hanuorauongchai, Mohammed N. Hug, Anup Karan, Gabriel M. Leung, Chiu Wan Ng, Badri Raj Pande, Keith Tin, Kanjana Tisayaticom, Laksono Trisnantoro, Yuhui Zhang, and Yuxin Zhao. Did the health card program ensure access to medical care for the poor during Indonesia's economic crisis? By Menno Pradhan, Fadia Saadah, and Robert Sparrow. A short note on updating the grilli and yang commodity price index; by Stephan Pfaffenzeller, Paul Newbold, and Anthony Rayner. Trade, production, and protection database, 1976-2004; by Alessandro Nicita, and Marcelo Olarreaga.
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The authors propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, they propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed.
... See More + The authors argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As their measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. The authors show that for a large set of countries their assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, they observe an interesting pattern of higher levels of overall inequality in countries where their measure finds higher between-group contributions.
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Policy Research Working Paper WPS3687 AUG 01, 2005
Elbers, Chris; Lanjouw, Peter; Mistiaen, Johan A.; Ozler, BerkDisclosed
Using recently completed "poverty maps" for Cambodia, Ecuador, and Madagascar, the authors simulate the impact on poverty of transferring an exogenously given budget to geographically defined subgroups of the population according to their relative poverty status.
... See More + They find large gains from targeting smaller administrative units, such as districts or villages. But these gains are still far from the poverty reduction that would be possible had the planners had access to information on household level income or consumption. The results suggest that a useful way forward might be to combine fine geographic targeting using a poverty map with within-community targeting mechanisms.
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Policy Research Working Paper WPS3419 OCT 01, 2004
Communities differ in important ways in their needs, capacities, and circumstances. Because central governments are not able to discern these differences fully, they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information.
... See More + Household and individual characteristics within communities can also vary substantially. A growing body of theoretical literature suggests that inequality within communities can influence policy outcomes in ways that are either harmful or helpful, depending on the circumstances. Until recently, empirical investigations into the impact of inequality have been held back by a lack of systematic evidence on community-level inequality. This study uses household survey and population census data to estimate per capita consumption inequality within communities in three developing economies. It finds that communities vary markedly in their degree of inequality. It also shows that there should be no presumption that inequality is less severe in poor communities. The kind of community-level inequality estimates generated here can be used in designing and evaluating decentralized antipoverty programs.
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Journal Article 77480 SEP 01, 2004
Elbers, Chris; Lanjouw, Peter F.; Mistiaen, Johan A.; Ozler, Berk; Simler, KenDisclosed
Trade policy and poverty reduction in Brazil by Glenn W Harrison, Thomas F. Rutherford, David G. Tarr, and Angelo Gurgel; Trade liberalization and industry wage structure: evidence from Brazil by Nina Pavcnik, Andreas Blom, Pinelopi Goldberg; and Norbert Schady; Lobbying, counterlobbying, and the structure of tariff protection in poor and rich countries by Olivier Cadot, Jaime de Melo, and Marcelo Olarreaga; Social protection in a crisis: Argentina's plan Jefes y Jefas by Emanuela Galasso and Martin Ravallion; On the unequal inequality of poor communities by Chris Elbers, Peter F.
... See More + Lanjouw, Johan A. Mistiaen, Berk Ozler , and Ken Simler; Ghost doctors: absenteeism in rural Bangladeshi health facilities by Nazmul Chaudhury and Jeffrey S. Hammer; Small-scale industry, environmental regulation, and poverty: the case of Brazil by Rajshri Jayaraman and Peter F. Lanjouw.
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Publication 38878 SEP 01, 2004
Harrison, Glenn, W.; Rutherford, Thomas F.; Tarr, David G.; Gurgel, Angelo; Pavcnik, Nina; Blom, Andreas; Goldberg, Pinelopi; Schady, Norbert; Cadot, Olivier; de Melo, Jaime; Olarreaga, Marcelo; Galasso, Emanuela; Ravallion, Martin; Elbers, Chris; Lanjouw, Peter F.; Mistiaen, Johan A.; Ozler, Berk; Simler, Ken; Chaudbury, Nazmul; Hammer, Jeffrey S.; Jayaraman, RajshriDisclosed
The authors discuss the use of imputed data in regression analysis, in particular the use of highly disaggregated welfare indicators (from so-called "poverty maps").
... See More + They show that such indicators can be used both as explanatory variables on the right-hand side and as the phenomenon to explain on the left-hand side. The authors try out practical ways of adjusting standard errors of the regression coefficients to reflect the error introduced by using imputed, rather than actual, welfare indicators. These are illustrated by regression experiments based on data from Ecuador. For regressions with imputed variables on the left-hand side, the authors argue that essentially the same aggregate relationships would be found with either actual or imputed variables. They address the methodological question of how to interpret aggregate relationships found in such regressions.
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Policy Research Working Paper WPS3294 MAY 01, 2004
Important differences exist between communities with respect to their needs, capacities, and circumstances. As central governments are not able to discern these differences fully, they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information.
... See More + However, household and individual characteristics within communities can also vary substantially. A growing theoretical literature suggests that inequality within communities can influence policy outcomes, and that this influence could be harmful or helpful, depending on the circumstances. Empirical investigations into the impact of inequality have, to date, largely been held back by a lack of systematic evidence on community-level inequality. The authors use household survey and population census data to estimate per capita consumption inequality within communities in three developing countries: Ecuador, Madagascar, and Mozambique. Communities are found to vary markedly from one another in terms of the degree of inequality they exhibit. The authors also show that there should be no presumption that inequality is less severe in poor communities. They argue that the kind of community-level inequality estimates generated in this paper can be used in designing and evaluating decentralized antipoverty programs.
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Policy Research Working Paper WPS3313 MAY 01, 2004
Elbers, Chris; Lanjouw, Peter F.; Mistiaen, Johan; Ozler, Berk; Simler, Ken
The authors construct and derive the properties of estimators of welfare that take advantage of the detailed information about living standards available in small household surveys and the comprehensive coverage of a census or large sample.
... See More + By combining the strengths of each, the estimators can be used at a remarkably disaggregated level. They have a clear interpretation, are mutually comparable, and can be assessed for reliability using standard statistical theory. Using data from Ecuador, the authors obtain estimates of welfare measures, some of which are quite reliable for populations as small as 15,000 households--a "town." They provide simple illustrations of their use. Such estimates open up the possibility of testing, at a more convincing intra-country level, the many recent models relating welfare distributions to growth and a variety of socioeconomic and political outcomes.
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Policy Research Working Paper WPS2911 OCT 31, 2002
