Finding the Poor

In many developing nations, there is a lack of information to help determine who is poor and who is not so poor.  One study identifies a novel way to identify those most in need: Ask the neighbors!

There are two striking results in the new paper, to be published in the American Economic Review later this year. First, when citizens are asked to make collective judgments about the relative wealth of their neighbors, the outcomes are very close to those produced by objective measures. Second, citizens are far more satisfied by the results when they are consulted than when they are left out of the process.