Full text (225 Kb)
Institution: University of Verona, Italy
Federico Perali is Professor of Applied Economics at the University of Verona, Italy. He earned the Ph.D. in Agricultural Economics at the University of Wisconsin, Madison in 1992. He is recipient of the 1993 outstanding dissertation award from the American Association of Agricultural Economics. He is author of the forthcoming book "The behavioural and welfare analysis of consumption. The cost of children, equity and poverty in Colombia" by Springer-Verlag. His research interests include welfare economics, household economics, consumption economics and the econometric analysis of household budget data of developing countries.
Title: "The cost of children, demographic targeting and poverty: An example for Colombia."
This study is concerned with the use of the estimates of the cost of Colombian children to target welfare programs to the most in need and to correctly identify the poor. The study first analyzes a fundamental question related to the estimation and use of the cost of a child. Does the cost of a child change as income changes? Can we compare the cost of a child of a rich household with the one of a poor household? In a country with large regional income disparities, such as Colombia, can we compare the cost of a child living in the North Coast of Colombia with the cost of a child living in Bogotà? Empirically, this question means testing whether Engel relations are parallel as household size increases. The non-parametric analysis show that the cost of children based on the consumption of necessities is independent of the level of income. We then use these results to evaluate the precision of the targeting of social welfare interventions aimed at reaching the most in need. Within population subgroups of relevant policy interest, we evaluate the impact of the precision of demographic targeting on poverty and inequality.