A Poverty Forecasting Tool

Poverty reduction has become the focus of economic policy in many Sub-Saharan African countries. As a result, a need for new social indicators has arisen to monitor the application and effectiveness of Poverty Reduction Strategy Papers (PRSPs). In recent years, there have been renewed efforts to develop tools aimed at better understanding the channels through which PRSP measures affect the poor. The approach presented in this paper links macroeconomic models with representative household and micro household income data to measure the effectiveness of poverty reduction policies.