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Working Paper No. 342
Inter-American Development Bank, Office of the Chief Economist, Washington, DC
This work builds on previous research to develop a methodology that simplifies the identification of the best policy options for poverty alleviation in a given country. When a population can be divided into subgroups according to an easily identifiable characteristic, the problem of alleviating poverty through a targeted mechanism can be viewed as one of choosing of three options: (i) provoking a marginal change in the average income of certain subgroups; (ii) changing the resource distribution within marginal subgroups; and (iii) generating a marginal change in the differences between the subgroups. Recent data from Mexico is applied.
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