Electricity Usage as A Proxy Indicator For Poverty Targeting

This perspective demonstrates that household electricity usage is a good proxy for poverty and a quick, efficient, and effective targeting mechanism for welfare benefits. As Sri Lanka’s economic crisis continues, up to 50% or more of the population will likely need state support, yet the existing welfare benefit scheme falls far short of its goals. Current targeting through Samurdhi reaches just about a quarter of all households and only 40% of the poorest decile of individuals. The analysis presented in this perspective shows that the alternative of using a threshold of 60kwh of electricity usage per month as a preliminary eligibility criterion will reach approximately 50% of the population and over 80% of the poorest among them and performs best among a set of alternatives, including Samurdhi.