Targeting by Proxy Means Testing: a Literature Review (UKR)

For targeting social assistance to the neediest population, means-testing of applicants is used. According to international practice, there is no uniform method of targeting social assistance that would be optimal for different social assistance programs and all countries. Applying complex methods of direct income estimation incurs high administrative costs, while simple means-testing methods are characterized by low accuracy. Scoring method involves the use of simple observable household characteristics for proxy means-testing of an applicant’s income and thus helps avoid fraud and errors associated with income declaration. The document describes methods of targeting social assistance and the results of their use in the world. The report contains a detailed analysis of pros and cons of applying scoring means-testing method.