estimated quantities of gasoline and diesel in the PECS 2016/2017. The quantity of household consumption of gasoline and diesel was estimated by dividing households’ self-reported expenditure in the survey by the 2017 final consumer price. The indirect effects of gasoline and diesel subsidies (used as inputs in the production process) were calculated based on the West Bank IO table and the “Cost-Push Model" (Inchauste and Jellema, 2018). We applied the indirect effects from gasoline and diesel subsidies to all applicable household residents’ expenditures in the West Bank<sup>59</sup> .

- **4.6 In-kind benefits**

**The assessment includes in-kind benefits for public education and public health.** Both allocation methods impute “average benefits” to users and individuals eligible for these public services, respectively, based on information from the PECS 2016/17 and government administrative data.

# **Education**

**This study follows the “average-cost approach” for users of public education services to allocate in-kind public education benefits.** First, the in-kind benefits for public education services (per student) were calculated at the national level based on administrative data of (executed) public expenditure on education divided by the number of total students enrolled in public schools from administrative accounts; different benefits were calculated for the basic and secondary levels of education. Second, the study infers potential beneficiaries from public in-kind education benefits in the PECS survey based on the following reported variables: (i) individuals currently enrolled in public schools; and (ii) self-reported information on “highest grade of education achieved” plus one year.<sup>60</sup> The admin numbers indicated that for 2017 there were 585,821 students enrolled in (public) basic education and 214,663 students enrolled in (public) secondary education. In the case of (public) basic education, the inference approach from the PECS resulted in a larger number of students than the administrative target<sup>61</sup> ; hence, a random simulation within the eligible pool was performed to sub-select the number of (public) basic students in the PECS that matched the administrative number.<sup>62</sup> Third for the students identified in the PECS as those enrolled in (public) basic and secondary education (calculated in the second step), the study imputes the average in-kind benefits differentiated for each education level (calculated in the first step).

# **Health**

**The analysis uses the “insurance approach” to allocate in-kind public health benefits.** First, the in-kind benefits from public health services (per individual) were calculated based on executed health expenditure data from administrative accounts (primary care versus hospitals) divided by the number of individuals insured under government insurance self-reported in the PECS. Second, the analysis tries to

> 59 All households’ expenditure items that have used gasoline or diesel as a production input will carry indirect effects from fuel subsidies.

> 60 The PECS does not have information on the current grade of education. We estimated this variable based on the highest grade of education achieved, plus one year for individuals currently enrolled in public schools. It is only possible to estimate the current grade for primary and secondary schooling.

> 61 Originally, the inference approach from the PECS resulted in 716,822 students enrolled in (public) basic education in the survey, 122 percent times higher than the admin target. After the random allocation, the number of (public) basic education students simulated in the PECS came down to 580,558 (99 percent of the admin target).

> 62 The random allocation approach was not needed for secondary education since the inference approach from the PECS resulted in 168,783 students enrolled in (public) secondary education according to the survey, which was 79 percent of the admin target. Hence, no random allocation was needed to sub-select students since there was no overestimation stemming from the PECS.

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