Is Targeting Deprived Areas an Effective Means to ReachPoor People? An assessment of one rationale for areabasedfunding programmes

Area-based programmes have long been a feature of urban policy in the UK.One rationale is that they are an effective means to target poor people. Areadeprivation indices are used to identify areas for targeting. This paper reviewsthe different results produced by these indices. It then examines theeffectiveness of the current Index of Multiple Deprivation in targeting the poor,demonstrating that area targeting using the IMD 2000 is a more complete wayof reaching the poor than has been claimed by opponents of area-based targetingin the past. However, it is more effective in reaching some sub-groups,particularly children, than others, and is also relatively inefficient. There is atrade off between efficiency and completeness. The use of area targeting shoulddepend on the type of intervention, the costs and benefits of producing complextargeting mechanisms, and the particular balance between completeness andefficiency in each case.[...]