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The small-area estimation technique developed for producing poverty maps has been applied in a large number of developing countries. Opportunities to formally test the validity of this approach remain rare due to lack of appropriately detailed data. This paper compares a set of predicted welfare estimates based on this methodology against their true values, in a setting where these true values are known. A recent study draws on Monte Carlo evidence to warn that the small-area estimation methodology could significantly over-state the precision of local-level estimates of poverty, if underlying assumptions of spatial homogeneity do not hold. Despite these concerns, the findings in this paper for the state of Minas Gerais, Brazil, indicate that the small-area estimation approach is able to produce estimates of welfare that line up quite closely to their true values. Although the setting considered here would seem, a priori, unlikely to meet the homogeneity conditions that have been argued to be essential for the method, confidence intervals for the poverty estimates also appear to be appropriate. However, this latter conclusion holds only after carefully controlling for community-level factors that are correlated with household level welfare.

Confidence intervals --- Descriptive statistics --- Education --- Enumeration --- Geographical Information Systems --- Precision --- Predictions --- Reliability --- Sample design --- Sample surveys --- Science and Technology Development --- Science Education --- Scientific Research and Science Parks --- Small Area Estimation Poverty Mapping --- Standard errors --- Statistical and Mathematical Sciences --- Validity

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Knowledge about development effectiveness is constrained by two factors. First, the project staff in governments and international agencies who decide how much to invest in research on specific interventions are often not well informed about the returns to rigorous evaluation and (even when they are) cannot be expected to take full account of the external benefits to others from new knowledge. This leads to under-investment in evaluative research. Second, while standard methods of impact evaluation are useful, they often leave many questions about development effectiveness unanswered. The paper proposes ten steps for making evaluations more relevant to the needs of practitioners. It is argued that more attention needs to be given to identifying policy-relevant questions (including the case for intervention); that a broader approach should be taken to the problems of internal validity; and that the problems of external validity (including scaling up) merit more attention.

Beneficiaries --- Counterfactual --- Economic Theory and Research --- Education --- Impact assessment --- Impact evaluation --- Infrastructure projects --- Intervention --- Learning --- Macroeconomics and Economic Growth --- Poverty Monitoring and Analysis --- Poverty outcomes --- Poverty Reduction --- Programs --- Science and Technology Development --- Science Education --- Scientific Research and Science Parks --- Targeting --- Tertiary Education

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It is assumed that added time to export adds cost to and lowers the volume of trade. Time delays may also affect the composition of trade and can disproportionately reduce trade in time-sensitive goods. This paper investigates the validity of these propositions using the World Bank Doing Business database and Enterprise Surveys for 64 developing countries. The authors find that in countries where there is longer time needed to export firms in time-sensitive industries are less likely to become exporters. Moreover, firms that do export have lower export intensities. Their findings imply that time to export is a significant determinant of comparative advantage. For example, consider two industries that have the same export probability and intensity - but differ in time-sensitivity by one standard deviation. Action taken to cut time to export by 50 percent for one industry opens a 6 percentage point difference between the export probabilities of the two industries. In addition, steps to cut time delays increase export intensities by 1.9 percentage points. This impact applies to industries with different productivity levels - and those in developing countries with different income levels.

Air --- Air transport --- Automotive sector --- Capital investments --- Comparative Advantage --- Cost-benefit analysis --- Economic Theory and Research --- Education --- Efficiency of infrastructure --- Free Trade --- Freight --- Infrastructure investment --- Inland transport --- Inspection --- International Economics & Trade --- International transport --- Science Education --- Scientific Research and Science Parks --- Shipping containers --- Transit --- Transport costs --- Transport Economics, Policy and Planning --- Transport modes --- Transport systems --- Transportation --- Transportation cost --- Transportation costs

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The authors examine the performance of small area welfare estimation. The method combines census and survey data to produce spatially disaggregated poverty and inequality estimates. To test the method, they compare predicted welfare indicators for a set of target populations with their true values. They construct target populations using actual data from a census of households in a set of rural Mexican communities. They examine estimates along three criteria: accuracy of confidence intervals, bias, and correlation with true values. The authors find that while point estimates are very stable, the precision of the estimates varies with alternative simulation methods. While the original approach of numerical gradient estimation yields standard errors that seem appropriate, some computationally less-intensive simulation procedures yield confidence intervals that are slightly too narrow. The precision of estimates is shown to diminish markedly if unobserved location effects at the village level are not well captured in underlying consumption models. With well specified models there is only slight evidence of bias, but the authors show that bias increases if underlying models fail to capture latent location effects. Correlations between estimated and true welfare at the local level are highest for mean expenditure and poverty measures and lower for inequality measures.

Capita Expenditure --- Degrees of Freedom --- Delta Method --- Econometrics --- Education --- Estimates of Poverty --- Explanatory Variables --- Finance and Financial Sector Development --- Financial Literacy --- Health, Nutrition and Population --- Household Survey --- Household Survey Data --- Households --- Macroeconomics and Economic Growth --- Parameter Estimates --- Population Census --- Population Policies --- Poverty Mapping --- Poverty Mapping Methodology --- Poverty Maps --- Poverty Measures --- Poverty Reduction --- Pro-Poor Growth --- Rural Development --- Rural Poverty Reduction --- Science and Technology Development --- Science Education --- Scientific Research and Science Parks --- Simulation Procedures --- Simulations --- Small Area Estimation --- Small Area Estimation Poverty Mapping --- Standard Deviation --- Standard Errors --- Statistical and Mathematical Sciences --- Variance-Covariance Matrix