A Proxy Means Test for Sri Lanka

33 Pages Posted: 10 Oct 2018 Last revised: 11 Oct 2018

See all articles by Ashwini Rekha Sebastian

Ashwini Rekha Sebastian

World Bank

Shivapragasam Shivakumaran

Centre for Poverty Analysis (CEPA)

Ani Rudra Silwal

Independent

David Locke Newhouse

World Bank

Thomas F. Walker

World Bank; Cornell University

Nobuo Yoshida

World Bank

Date Written: October 9, 2018

Abstract

This paper intends to inform the effort of the Sri Lankan government to reform the targeting efficacy of its social protection programs, in particular, Samurdhi, which currently distributes benefits based on self-reported income. The paper develops a proxy means test for Sri Lanka based on the Household Income and Expenditure Survey 2016 and evaluates its performance for targeting benefits of Samurdhi. The paper considers a range of models and policy parameters that could be applied depending on data availability and country preferences. The results indicate that switching to a proxy means test could considerably improve the targeting performance of Samurdhi and would significantly improve the poverty impact of the program. The analysis finds that the performance of the proposed proxy means test model suffers when the coefficients are estimated from samples smaller than 1,000 households. However, the analysis does not find a similar loss of model performance when the model is estimated from seasonal data, provided the sample size is sufficiently large. The proposed model could be applied to targeting a variety of safety net programs after validating and refining the model by conducting a pilot survey.

Suggested Citation

Sebastian, Ashwini Rekha and Shivakumaran, Shivapragasam and Silwal, Ani Rudra and Newhouse, David Locke and Walker, Thomas F. and Walker, Thomas F. and Yoshida, Nobuo, A Proxy Means Test for Sri Lanka (October 9, 2018). World Bank Policy Research Working Paper No. 8605, Available at SSRN: https://ssrn.com/abstract=3263802

Ashwini Rekha Sebastian (Contact Author)

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Shivapragasam Shivakumaran

Centre for Poverty Analysis (CEPA) ( email )

No. 29, Gregory's Road
Colombo 07
Sri Lanka

Ani Rudra Silwal

Independent

David Locke Newhouse

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Thomas F. Walker

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Cornell University ( email )

Department of Economics
414 Uris Hall
Ithaca, NY 14853-7601
United States

HOME PAGE: http://sites.google.com/a/cornell.edu/thomaswalker/

Nobuo Yoshida

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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