Effect of Covid-19 on Monetary Poverty in Peruvian Households: A Small Area Approach

This study applies the small area estimation model developed in Sikov and Cerda-Hernández (2024) to generate detailed maps of the percentage of households living in monetary poverty at the district level in Peru for the years 2019 and 2023. Using data from the ENAHO, the incidence of poverty was estimated at the district level, allowing for the identification of high-vulnerability clusters and the analysis of changes in the spatial distribution of poverty before and after the COVID-19 pandemic. The disaggregation and comparison at the district level reveal significant disparities, crucial for the targeting of public policies.

Our results demonstrate that, in most departments, poverty exceeds pre-pandemic levels, indicating a setback in socioeconomic progress. Notably, Metropolitan Lima experienced a marked deterioration, with districts reaching poverty levels between 25% and 40% in 2023. This analysis underscores the need for specific and targeted interventions to mitigate the persistent impact of the pandemic and reverse the increase in poverty in the country.