Figure 4. Fixed effects model: the impact of the FAIS on household income per capita and the Gini, 2005–14

|0.60<br> <br>0.15<br>f|
|---|
|020<br>0.30<br>0.40<br>0.50<br>centage of<br>per capita if<br>by 10%<br>005<br>0.10<br>coeficient i<br>by 10%|
|000<br>0.10<br>.<br>e in per<br>ncome<br>ncrease<br>000<br>.<br>n GINI<br>crease|
|-0.30<br>-0.20<br>-0.10<br>.<br>Differenc<br>household i<br>FAIS i<br>-0.05<br>.<br>Difference i<br>FAIS in|
|-040<br>010<br>|
|_ote:_The deciles of income correspond to the cutoff points in the division of households in each municipality into 10 equal groups. A<br>onetary values are in real terms at August 2014 prices and expressed in logarithms. The figure represents the fixed effects mod<br>stimator, and the error bars represent the 95 percent Wald confidence interval. Other variables included in the regression, but n<br>hown are (a) own revenues, unconditional transfers, and conditional transfers of the municipality; (b) blue-collar and white-coll<br>orkers per inhabitant; (c) productivity per employed worker; (d) private business assets; (e) semiurban municipalities (populatio<br>etween 2,500 and 15,000); and (f) cities (more than 15,000 inhabitants). For the results of all variables see Annex 3.<br>esults of a simple fixed effects model suggest that FAIS is associated with an increase of average access t<br>asic services (Table 3, panel b)—such as electricity, sewerage, water, and a toilet in the dwelling—and the shar<br>.<br>x<br>1<br>2<br>3<br>4<br>5<br>6<br>7<br>8<br>9<br>Deciles of household income per capita<br>-.<br>GINI|
|f the population with access to health care (panel c). Additionally, a simple fixed effects model does not fin<br>ny significant results for poverty measures associated with any of the three poverty (Table 3, panel a). Indee<br>n endogeneity test run to confirm or reject the double causality between the FAIS and the socioeconom<br>onditions studied rejects the null hypothesis that the fund may be treated as exogenous.<sup>17</sup><br>Table 3. Fixed effects model without instrumental variable: the impact of the FAIS on poverty 2005–14<br>a. Monetary measures: poverty<br>_Food_<br>_Capabilities_<br>_Assets_|
|FAIS<br>−0.355<br>−0.531<br>−0.683|
|(0.489)<br>(0.490)<br>(0.455)|
|N<br>6,143<br>6,143<br>6,143|
|Municipalities<br>2,154<br>2,154<br>2,154|
|Endogeneity test<br>0.4510<br>0.9194<br>0.0422|
|<br>b. Nonmonetary measures: basic services|
|<br>_Electricity_<br>_Sewerage _<br>_Water_<br>_Floor_<br>_Restroom_|
|FAIS<br>3.107***<br>8.356***<br>9.067***<br>0.333<br>−1.956***|
|(0.429)<br>(1.025)<br>(1.019)<br>(0.328)<br>(0.208)|
|<br> <br> <br> <br> <br>c. Nonmonetary measures: education and health|
|_Incomplete elementary_<br>_Illiteracy 15+_<br>_Illiteracy 6–14_<br>_Health care_|
|FAIS<br>−0.830***<br>11.27***<br>0.954<br>18.36***|
|(0.163)<br>(0.861)<br>(0.599)<br>(1.475)|
|N<br>6,107<br>6,107<br>6,107<br>6,107|
|Municipalities<br>2,118<br>2,118<br>2,118<br>2,118|

_Note:_ The deciles of income correspond to the cutoff points in the division of households in each municipality into 10 equal groups. All monetary values are in real terms at August 2014 prices and expressed in logarithms. The figure represents the fixed effects model estimator, and the error bars represent the 95 percent Wald confidence interval. Other variables included in the regression, but not shown are (a) own revenues, unconditional transfers, and conditional transfers of the municipality; (b) blue-collar and white-collar workers per inhabitant; (c) productivity per employed worker; (d) private business assets; (e) semiurban municipalities (population between 2,500 and 15,000); and (f) cities (more than 15,000 inhabitants). For the results of all variables see Annex 3.

Results of a simple fixed effects model suggest that FAIS is associated with an increase of average access to basic services (Table 3, panel b)—such as electricity, sewerage, water, and a toilet in the dwelling—and the share of the population with access to health care (panel c). Additionally, a simple fixed effects model does not find any significant results for poverty measures associated with any of the three poverty (Table 3, panel a). Indeed, an endogeneity test run to confirm or reject the double causality between the FAIS and the socioeconomic conditions studied rejects the null hypothesis that the fund may be treated as exogenous.<sup>17</sup> _Note:_ Mean income corresponds to the average household income per capita in each municipality in logarithms. Monetary values are expressed in real terms in August 2014. Pooled OLS FAIS corresponds to the average monthly per capita value of the three previous years. Other variables included in the regression, but not shown are (a) own revenues, unconditional transfers, and conditional transfers of the municipality; (b) blue-collar and white-collar workers per inhabitant; (c) productivity per employed worker; (d) private business assets; (e) semiurban municipalities (population between 2,500 and 15,000); and (f) cities (more than 15,000 inhabitants). Standard error in parentheses. *** p < .01 ** p < .05 * p < .1

> 17 The endogeneity test confirms the hypothesis that the fund can be treated as exogenous.

15