Operational Assessment of Monetary Poverty by Proxy Means Tests. The Example of Peru

Despite the concern among donors, governments and practitioners about their success in reaching the poor, the lack of reliable low-cost tools makes it difficult to determine if development programs meet their poverty targeting objectives. This study develops an operational assessment tool of monetary poverty for Peru. In a comparative step-by-step procedure, it discusses aspects like the practicability of indicators, methods for indicator selection, comparisons of logistic, least-square, and quantile regression, the poverty classification of households, robustness of the tools over time and across sub-groups, and what Receiver Operating Characteristic (ROC) curves can contribute.
In doing that, it also provides a general methodological pathway for the development of tools used for time and cost-saving targeting assessments.