PAPER 1
Self-Targeting: Evidence
from a Field Experiment in
Indonesia
Review Paper 1 :
Alatas, V., Banerjee, A., Hanna, R., Olken, B. A., Purnamasari,
R., & Wai-Poi, M. (2016). Self-Targeting. Journal of Political
Economy, 124(2), 371-427.
THE OBJECTIVE Of This Paper
Automatic Screening Treatment
PKH
Benefit : US$ 130 / year
Duration : 6 years
PKH : Program Keluarga Harapan
Self-Targeting Treatment
Indonesia’s Conditional Cash Transfer program
since 2007
which one
is better?
Target :
400 Village
THE NOVELTY Of This Paper
● This project was carried out during the 2011 expansion of PKH to
new areas that had never had PKH before
● six districts (two each in the provinces of Lampung, South
Sumatra, and Central Java) from the expansion areas to include
a wide variety of cultural and economic environments
CONDITION
Automatic Screening Treatment
the usual government procedure was followed:
■ the statistics office
■ working with local government officials
■ drew up a list of potential beneficiaries
■ interviewed everyone at their homes
and then automatically enrolled those who passed using the same asset test
that was used in self-targeting.
■
■
Self-Targeting Treatment
■
■
Interested households were required to go to a central registration site
to take an asset test administered by the statistics office.
This entailed both traveling up to a few kilometers to the application
site and waiting in line to apply.
The application costs varied by the distance to the application site.
the highest level of application costs = the sum total of about half a
day’s missed work, a few kilometers of travel, and a few hours of
waiting
THE METHODOLOGY Of This Paper
Empirical analysis in four stages:
Stage 1
Examine PKH
program applicants in
400 villages
Stage 2
Compare
self-selection and
government
automatic screening
Stage 3
Assess the impact of
higher application
costs on targeting
Stage 4
Use generalized
method of moments
to estimate the
model.
THE METHODOLOGY Of This Paper
Setting and Experimental Design
PROCESS I
PROCESS II
PROCESS III
PROCESS IV
PROCESS V
PROCESS VI
Setting PKH
Program
Sample
Selection
Experimental
Design
Data, Summary
Statistics, and
Balance Test
Creating Model
Comparing
per capita
consumption < 80 %
of the poverty line (5%
poorest)
400 villages from 6
districts (Lampung,
South Sumatra, and
Central Java (30%
urban, 70% rural)
Randomly assigned
400 villages to two
targeting methods:
self-targeting or
automatic screening.
1. Data Collection
2. Summary
Statistics and
Experimental Validity
1. Model Setup
2. Analysis :
- The Benchmark Case,
- Adding Shocks,
- Nonlinearities in the
Application Cost,
- Sophisticated Vs
Unsophisticated Households
Comparing
Self-Selection and
Automatic Screening
THE RESULT Of This Paper
SAMPLE SELECTION
EXPERIMENTAL DESIGN
THE RESULT Of This Paper
The Model
: average probability to gets benefits
: conditional distribution
: government decision rule
: observation incomes
l : cost
THE RESULT Of This Paper
Probability to Show-Up & Receive Benefits
THE RESULT Of This Paper
THE CONCLUSION Of This Paper
Conclusion Point
Summary
Application cost in Self-Selection Treatment
● increases self-selection among the poor.
● improves targeting efficiency by excluding the rich from the program.
● can be a powerful tool for improving targeting outcomes.
Comparison between treatment
Self Selection outperforms standard government procedure and automatic targeting.
Impact of Increasing Ordeal Costs
Increasing distance to the application site reduces the number of applicants.
Key Driver Behind Improved Targeting
The rich are deterred from applying due to a perceived low probability of success.
Insights on Administrative Barriers
● Administrative barriers should be viewed as screening devices, not just barriers to
take-up.
● Overly burdensome ordeals may not necessarily lead to further improvements in
targeting.
Future Research Direction
Designing screening mechanisms to boost participation among the poor while
discouraging the rich.
THE FINDING In This Paper
●
●
requiring beneficiaries to apply for benefits results in substantially poorer beneficiaries
than automatic enrollment using the same asset test
adding a small application cost to a transfer program can substantially improve targeting
through self-selection
RELATION to the Theories
Discussion