Haushofer, Johannes, Paul Niehaus, Carlos Paramo, Edward Miguel, Michael Walker. (2022). “Targeting impact versus deprivation”, National Bureau of Economic Research (NBER) Working Paper #30138.
A large literature has examined how best to target anti-poverty programs to those most deprived in some sense (e.g., consumption). We examine the potential tradeoff between this objective versus targeting those most impacted by such programs. We work in the context of an NGO cash transfer program in Kenya, utilizing recent advances in machine learning methods and dynamic outcome data to learn proxy means tests that target both objectives in turn. Targeting solely on the basis of deprivation is generally not attractive under standard social welfare criteria, even when the planner’s preferences
are highly redistributive.