We know, from our experience with teleuse@BOP surveys, that getting an accurate fix on levels of income and assets (poverty) is not easy. An experiment in Indonesia suggests that asking the village to decide is superior, because it is almost as accurate as the standard method which uses household assets and generates greater buy-in (less complaints).
One thing I did not get from the writeup was relative cost. Convening a community meeting is not costless. Neither is the asset-based method. Also, the account refers to villages. Will this work as well in cities?
The field experiment, conducted in collaboration with the Indonesian government and the World Bank, offered a small amount of cash to households deemed below the poverty line. In one-third of the villages, the government used a proxy means test involving household assets to create an objective measure of wealth. Another third of the villages used the “community method,” as the researchers call it: With the assistance of facilitators from the research project, citizens from certain neighborhoods would gather at meetings and subjectively rank the wealth of the local inhabitants. The final third of the villages employed a hybrid of both methods.
The economists also used a research firm to survey all the citizens about their spending habits. Using this spending data as a baseline for wealth, the results show that the proxy means test is the best method for estimating wealth — but only by a slim margin.
On the other hand, the community method led to 60 percent fewer complaints among villagers about the results of the programs, compared to the proxy means test.
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