Tools and methods



EX-ACT: climate change impact assessment

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Estimates the likely impact of agricultural and forestry development projects on greenhouse gas emissions and sequestration, in terms of carbon balances. It is free, easily scalable, requires a minimal amount of data and can significantly aid integrated policy-making. See EX-ACT website»

VCA – value-chain analysis tool

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Software for carrying out value-chain analyses for agricultural and rural development policy. By storing relevant data it can calculate flows of physical outputs and inputs, flows of aggregated costs, value-added and net benefits. In addition, it allows the direct comparison of different hypothetical scenarios.

WinDASI - a software for cost-benefit analysis (CBA) of investment projects

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This software allows users to analyse the financial and economic viability of investments. In particular, it facilitates the systematic storage of data for Cost-Benefit Analysis and allows calculation of: a) flows of physical quantities of outputs, inputs and investment items; b) flows of current, discounted and cumulative costs, benefits, and net benefits; c) flows of incremental (With-Without project) current, discounted and cumulative net benefits; and e) indicators of financial and economic viability such as the Net Present Value (NPV), the Internal Rate of Return (IRR), the Benefit/Cost Ratio, (BCR), the Switching Values (SVs) and Sensitivity tests.


Equivalence scales

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Inequality and poverty analysis may be based on income distribution for households rather than individuals. Problems arise when comparing the monetary incomes of households with different numbers of members. To compare these situations meaningfully, an adjustment (known as an equivalence scale) should be applied. An equivalence scale may be a simple per capita measure or a more sophisticated way of taking into account the fact that, within given households, economies of scale may operate with regard to the consumption of certain goods. Applying an equivalence scale to monetary incomes of different households results in an equivalenced income that can be used for inequality, poverty or welfare analysis. 

Monitoring policy impacts (MPI)

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MPI is a policy management instrument, applied to improve the efficacy of policies in reaching their objectives. MPI identifies diversions of reality from plan (as well as the causes of such diversions) as and when they occur, thus allowing for immediate corrections, and respective adjustments in policy design and implementation. With its special features – focussing on impacts at policy level, tracing of flaws, timeliness of recording and feedback – MPI is related to, but distinct from, other conventional monitoring and evaluation concepts, such as implementation monitoring, project and programme monitoring, and evaluations which are conducted ex-post in longer time intervals only.

Policy impacts on income inequality and poverty

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Nowadays, most of the strategic objectives of national and international agencies dealing with socio-economic development policies focus directly or indirectly on poverty reduction, and/or balanced, sustainable "pro-poor" growth. This material provides a step-wise approach, a set of conceptual instruments and operational tools to assess a range of poverty and income distribution indicators relevant for policy making and policy impact simulations. It begins with "axioms" of inequality and poverty measurement, ie. desirable properties of poverty and inequality indexes, and establishes some fundamental concepts related to income distributions, equivalence scales and poverty lines, social welfare functions and the analysis of dominance through Lorenz curves. This set of papers covers the broad spectrum of the most relevant poverty and inequality indexes, comprising simple poverty and inequality measures, the Gini index, FGT poverty indicators, the Theil and other "entropy" class indexes, selected welfare-based measures of inequality such as Atkinson's index, decomposition by sub-groups and income sources of selected indexes such as the Gini and Theil indexes. This material, tested and applied in various FAO policy assistance activities in different countries, is complemented by selected sets of commands for the STATA software, which are a very useful reference when using large micro-data sets (at household or individual level). Besides facilitating the practical calculation of most indexes, they constitute an alternative to some "black-box" commands provided by standard software packages. 

Introduction to Social accounting matrices: Concepts and examples

[Publication forthcoming]
This paper, by means of a step-wise approach, illustrates how to work out accounting multipliers for policy analysis. Starting with the structure of a Social Accounting Matrix (SAM) the paper explains how to split it into endogenous and exogenous components, how to invert the matrix and how to make use of the accounting multipliers for policy impact analysis. Examples are provided at different stages of the process.

Social welfare analysis of income distribution

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This set of material illustrates how various Lorenz Curves can be used to identify the best income distribution on social welfare grounds, within a set of alternative income distributions generated by different policy options. Concept of social welfare and the possible ways to define social welfare functions. 

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