Self-selection or self-targeting, which prompts the needy individual to enrol himself as a beneficiary for government's poverty alleviation welfare programmes, has been proved to be a better method as compared to the "community" or "Proxy Means Testing (PMT)" methods used by governments in defining population below the poverty line, he said.
Banerjee, currently the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology (MIT), was delivering the first Suresh Tendulkar memorial lecture here.
Stating that "community targeting" of the poor involved "moral perception" of poverty that went beyond the consumption factor, Banerjee said even for lucrative welfare schemes of Government only 60 per cent of the poor show up.
During the lecture, the renowned economist extensively cited findings of a poverty defining programme undertaken in Indonesia in which he was involved.
It was important to find out "the poorest of the poor" and not just "poor" by avoiding "inclusion and exclusion"
errors while identifying the beneficiaries, Banerjee said.
He said the option of distributing "money or food" for the poor is a debatable issue in view of an inefficient Public Distribution System (PDS).
Banerjee said poverty line can be "ad hoc" and involves a "common sense judgement" telling us about whom we should worry most, adding it can not always be perfect.