Publication:
Benefit Incidence with Incentive Effects, Measurement Errors and Latent Heterogeneity

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dc.contributor.authorRavallion, Martin
dc.contributor.authorChen, Shaohua
dc.date.accessioned2013-10-02T13:56:32Z
dc.date.available2013-10-02T13:56:32Z
dc.date.issued2013-08
dc.description.abstractEmpirical studies of tax and benefit incidence routinely ignore behavioral responses and measurement errors. This paper offers an econometric method of estimating the mean benefit withdrawal rate (marginal tax rate) allowing for incentive effects, measurement errors, and correlated latent heterogeneity in incidence. Under the method's identifying assumptions, a feasible instrumental variables estimator corrects for incentive effects and measurement errors, and provides a bound for the true value when there is correlated incidence heterogeneity. A case study for a large cash transfer program in China indicates that past methods of assessing benefit incidence using either nominal official rates or raw tabulations from survey data are deceptive. The program entails a nominal 100 percent benefit withdrawal rate -- a poverty trap. However, the paper finds that the actual rate is much lower, and clearly too low in the light of the literature on optimal income taxation. The paper discusses likely reasons based on the qualitative observations.en
dc.identifierhttp://documents.worldbank.org/curated/en/2013/08/18111657/benefit-incidence-incentive-effects-measurement-errors-latent-heterogeneity-benefit-incidence-incentive-effects-measurement-errors-latent-heterogeneity
dc.identifier.doi10.1596/1813-9450-6573
dc.identifier.urihttps://hdl.handle.net/10986/16006
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No.6573
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABSOLUTE VALUE
dc.subjectACCOUNTING
dc.subjectAGGREGATE INCOME
dc.subjectANTI-POVERTY
dc.subjectAVERAGE INCOME
dc.subjectAVERAGE RATE
dc.subjectBASE YEAR
dc.subjectBENCHMARK
dc.subjectCASH TRANSFER PROGRAMS
dc.subjectCASH TRANSFERS
dc.subjectCHILD LABOR
dc.subjectCLASSICAL ECONOMISTS
dc.subjectDATA SETS
dc.subjectDEMOCRACY
dc.subjectDEVELOPED COUNTRIES
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDEVELOPMENT POLICY
dc.subjectDISTRIBUTIONAL IMPACT
dc.subjectDOWNWARD BIAS
dc.subjectECONOMETRICS
dc.subjectECONOMIC BENEFITS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC HISTORY
dc.subjectECONOMIC INEQUALITY
dc.subjectECONOMIC POLICIES
dc.subjectECONOMIC RESEARCH
dc.subjectECONOMIC REVIEW
dc.subjectECONOMIC STUDIES
dc.subjectECONOMIC TRANSFORMATION
dc.subjectECONOMICS
dc.subjectELASTICITY
dc.subjectELASTICITY OF SUBSTITUTION
dc.subjectEMPIRICAL STUDIES
dc.subjectEMPLOYMENT INCOME
dc.subjectEXPECTED VALUE
dc.subjectEXPLANATORY VARIABLES
dc.subjectFINANCIAL CRISIS
dc.subjectGROWTH RATES
dc.subjectHIGH UNEMPLOYMENT
dc.subjectHOUSEHOLD INCOME
dc.subjectHOUSEHOLD NEEDS
dc.subjectHOUSEHOLD SURVEY
dc.subjectHUMAN DEVELOPMENT
dc.subjectIMPACT ON POVERTY
dc.subjectINCENTIVE EFFECTS
dc.subjectINCIDENCE ANALYSIS
dc.subjectINCOME
dc.subjectINCOME COMPONENTS
dc.subjectINCOME DISTRIBUTION
dc.subjectINCOME GAP
dc.subjectINCOME INEQUALITY
dc.subjectINCOME LEVEL
dc.subjectINCOME POVERTY
dc.subjectINCOME SHOCKS
dc.subjectINCOME SOURCES
dc.subjectINCOME TAXATION
dc.subjectINCOME TRANSFER
dc.subjectINCOMES
dc.subjectINEQUALITY
dc.subjectINEQUALITY AVERSION
dc.subjectINNOVATION
dc.subjectINSURANCE
dc.subjectLABOR FORCE
dc.subjectLABOR FORCE PARTICIPATION
dc.subjectLABOR MARKET
dc.subjectLABOR MARKETS
dc.subjectLABOR SUPPLY
dc.subjectLABOUR
dc.subjectLABOUR MARKET
dc.subjectLABOUR SUPPLY
dc.subjectLINEAR REGRESSION
dc.subjectMEAN INCOME
dc.subjectMEASUREMENT ERROR
dc.subjectMEASUREMENT ERRORS
dc.subjectNEGATIVE CORRELATION
dc.subjectNOMINAL RATE
dc.subjectOLD AGE
dc.subjectOPEN UNEMPLOYMENT
dc.subjectPOLICY CHANGES
dc.subjectPOLICY DESIGN
dc.subjectPOLICY DISCUSSIONS
dc.subjectPOLICY MAKING
dc.subjectPOLICY REFORM
dc.subjectPOLICY RESEARCH
dc.subjectPOLITICAL ECONOMY
dc.subjectPOOR
dc.subjectPOOR COUNTRIES
dc.subjectPOOR PEOPLE
dc.subjectPOSITIVE CORRELATION
dc.subjectPOVERTY ALLEVIATION
dc.subjectPOVERTY GAP
dc.subjectPOVERTY IMPACT
dc.subjectPOVERTY LINE
dc.subjectPOVERTY LINES
dc.subjectPOVERTY MEASURE
dc.subjectPOVERTY REDUCTION
dc.subjectPOVERTY REDUCTION OBJECTIVE
dc.subjectPRIVATE TRANSFERS
dc.subjectPUBLIC ECONOMICS
dc.subjectPUBLIC POLICY
dc.subjectPUBLIC SPENDING
dc.subjectRANDOM EFFECTS
dc.subjectREDISTRIBUTION POLICIES
dc.subjectREDISTRIBUTIVE POLICIES
dc.subjectREDUCING POVERTY
dc.subjectRURAL
dc.subjectSAFETY
dc.subjectSAFETY NET
dc.subjectSAFETY NETS
dc.subjectSERIAL CORRELATION
dc.subjectSOCIAL ASSISTANCE
dc.subjectSOCIAL DEMOCRACY
dc.subjectSOCIAL POLICIES
dc.subjectSOCIAL POLICY
dc.subjectSOCIAL PROGRAMS
dc.subjectSOCIAL SAFETY
dc.subjectSOCIAL SECURITY
dc.subjectSOCIAL SPENDING
dc.subjectTARGETING
dc.subjectTAXATION
dc.subjectUNEMPLOYED
dc.subjectUNEMPLOYMENT
dc.subjectWAGES
dc.subjectWAR
dc.subjectWEALTH
dc.subjectWELFARE SYSTEM
dc.subjectWORKING HOURS
dc.subjectmarginal tax
dc.subjectfiscal incidence
dc.subjectoptimal taxation
dc.subjecttransfers
dc.subjectpoverty
dc.titleBenefit Incidence with Incentive Effects, Measurement Errors and Latent Heterogeneityen
dspace.entity.typePublication
okr.crosscuttingsolutionareaJobs
okr.crossref.titleBenefit Incidence with Incentive Effects, Measurement Errors and Latent Heterogeneity
okr.date.disclosure2013-08-01
okr.date.doiregistration2025-04-10T11:55:35.554242Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2013/08/18111657/benefit-incidence-incentive-effects-measurement-errors-latent-heterogeneity-benefit-incidence-incentive-effects-measurement-errors-latent-heterogeneity
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeSocial Protection and Labor
okr.globalpracticePoverty
okr.guid877301468331780079
okr.identifier.doi10.1596/1813-9450-6573
okr.identifier.externaldocumentum000158349_20130815084227
okr.identifier.internaldocumentum18111657
okr.identifier.reportWPS6573
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/08/15/000158349_20130815084227/Rendered/PDF/WPS6573.pdfen
okr.region.countryChina
okr.topicPoverty Reduction::Rural Poverty Reduction
okr.topicServices and Transfers to Poor
okr.topicEconomic Theory and Research
okr.topicPoverty Reduction::Inequality
okr.topicSocial Protections and Labor::Labor Policies
okr.topicMacroeconomics and Economic Growth
okr.unitPoverty and Inequality Team, Development Research Group
okr.volume1 of 1
relation.isAuthorOfPublicationd53ceb26-d2be-50fc-a6b3-5bd777691c9c
relation.isAuthorOfPublicationc4b5feae-3e32-5f73-afbd-b9f477ec8266
relation.isAuthorOfPublication.latestForDiscoveryc4b5feae-3e32-5f73-afbd-b9f477ec8266
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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