Identifying beneficiary households for cash payments in Iran based on Proxy Means Test

Targeting the protecting programs such as subsidies requires identifying the poor in the society. In order to recognize beneficiary households for cash payment after subsidy reform in Iran, Proxy Means Test was applied in this study to households’ survey data of 2009. Based on the findings, it is possible to identify the poor not based on their claimed incomes but according to their total scores calculated by their traits, asset ownership and places of living. Those who own car, motorcycle, PC, have their own orchard and invested on fixed assets and/or live in houses larger than 100 m², for instance, are found not to be beneficiaries. Moreover, the government can protect reasonable people by choosing targeting line of 40% in the society.