Poverty targeting in public programs: A Comparison of Some Nonparametric Tests and their Application to Indian Microfinance

Many popular social programmes have limited coverage among households at the very bottom of the income and wealth distribution. If a programme reaches the poor, but neglects the destitute, the (pre-programme) income distribution of participants and non-participants will cross. We are interested in the statistical methods that can be used to test for this particular pattern of programme participation. Our numerical simulations of data on household expenditures and membership of micro-credit groups suggests that participation among the poorest households in the study area was lower than that of slightly richer households.