Benefits on the Margin : Observations on Marginal Benefit Incidence
Benefit incidence analysis has become a popular tool over the past decade, especially for researchers at the World Bank. Despite or perhaps because of the popularity of this method, recent research has pointed out many of its limitations. One of th...
| Main Author: | |
|---|---|
| Format: | Journal Article |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/01/17741871/benefits-margin-observations-marginal-benefit-incidence http://hdl.handle.net/10986/17170 |
| Summary: | Benefit incidence analysis has become a
popular tool over the past decade, especially for
researchers at the World Bank. Despite or perhaps because of
the popularity of this method, recent research has pointed
out many of its limitations. One of the most common
criticisms of benefit incidence analysis is that its
description of average participation rates is not
necessarily useful in guiding marginal changes in public
spending policies. This article considers a variety of
methods for analyzing the marginal benefit incidence of
policy changes. A key conceptual point is that despite the
fact that the various methods measure marginal incidence,
they do not measure the same thing nor are they intended to
do so. There are many possible policy changes and thus many
margins of interest. Each method captures one of these and
so is of interest for some analyses and inappropriate for
others. Empirically, the precision of the methods differs
substantially, with those relying on differenced data or
aggregations of households yielding standard errors that are
quite large relative to the estimated shares. |
|---|