Article: article from journal or magazin.
The allocation of benefits under uncertainty: a decision-theoretic framework
We consider the problem of targeting benefits when the decision-maker cannot ascertain an applicant's income, but can assign probabilities with respect to the level of his resources. A decision-theoretic framework is used to analyze the decision to grant a benefit of fixed size. The proposed rule consists in balancing the expected social cost of denying assistance to the needy (type-I error) against that of granting a benefit to a non-poor (type-II error). Thus, when the costs of type-I errors are on the rise, or those of type-II errors fall, it becomes more desirable to increase population coverage of the programme.
Poverty Resource Allocation
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