_Table 10: Albania – Random loss shock_

|**Targeting →**<br>**Budget ↓**|**Original**<br>**Beneficiaries**|**Means**<br>**Testing (Ex-**<br>**Ante Poor)**|**Means**<br>**Testing**<br>**(Post Shock**<br>**Poor)**|**Universal **<br>|**PMT Ex-ante **<br>**Eligibility ↓**<br>**Random loss S**<br>**Household**|**PMT Post**<br>**Shock**<br><br>**hock**<br>|**Perfect**<br>**Loss**<br>**Indicator**|**Imperfect**<br>**Loss**<br>**Indicator**|**PMT Ex-**<br>**ante or**<br>**Perfect**<br>**Loss**<br>**Indicator**|**PMT Post**<br>**Shock or**<br>**Perfect**<br>**Loss**<br>**Indicator**|
|---|---|---|---|---|---|---|---|---|---|---|
|**Poverty Rate**|**(1a)**|**(2)**|**(3)**|**(4)**<br>**Pre-shoc**|**(5)**<br>**k: 0.320; Post-**|**(6)**<br>**shock: 0.37**|**(7)**<br>**0**|**(8)**|**(9)**|**(10)**|
|(1) 0.05% GDP|-0.007|-0.009|-0.008|-0.005|-0.007|-0.007|-0.005|-0.005|-0.005|-0.005|
|(2) 1.0% GDP|-0.027|-0.061|-0.056|-0.020|-0.030|-0.029|-0.018|-0.019|-0.022|-0.022|
|**Poverty Gap Sqr.**<br>||||**Pre-shoc**|**k: 6.721; Post-s**|**hock: 16.72**|**0**||||
|(1)0.05% GDP|-0.473|-0.584|-0.637|-0.460|-0.518|-0.509|-0.522|-0.516|-0.515|-0.511|
|(2) 1.0% GDP|-1.709|-3.517|-4.572|-1.812|-2.582|-2.478|-2.777|-2.689|-2.727|-2.658|
|**Gini**<br>||||**Pre-shoc**|**k: 0.371; Post-**|**shock: 0.42**|**2**||||
|(1)0.05% GDP|-0.001|-0.002|-0.002|-0.001|-0.002|-0.002|-0.001|-0.001|-0.002|-0.002|
|(2)1.0% GDP|-0.013|-0.029|-0.031|-0.010|-0.020|-0.019|-0.013|-0.013|-0.016|-0.016|
|**Coverage**|||||||||||
|(1)Average Transfer|$105.1|$70.3|$60.0|$18.7|$70.3|$60.1|$64.9|$87.0|$38.2|$35.9|
|(2)Average Transfer|$1,946.5|$1,301.7|$1,112.4|$345.5|$1,302.4|$1,112.8|$1,201.8|$1,568.3|$708.6|$664.8|
|Beneficiaries|137,071|204,973|239,848|772,197|204,856|239,772|222,010|165,599|376,548|401,350|
|Ex-antepoor|0.28|1.00|1.00|1.00|0.60|0.65|0.27|0.22|0.71|0.75|
|Ex-ante non-poor|0.13|0.00|0.07|1.00|0.17|0.22|0.33|0.25|0.45|0.49|
|Ex-ante Vulnerable|0.17|0.00|0.08|1.00|0.25|0.33|0.35|0.26|0.53|0.58|
|Post-shockpoor|0.26|0.87|1.00|1.00|0.54|0.59|0.36|0.29|0.75|0.78|

Note: impacts are color-coded from dark red (highest impacts) to dark blue (lowest impact). Not all households declare labor income.

Under this shock, results and optimal responses change substantially. In both Moldova and North Macedonia, covering the pre-shock poor either through perfect means testing or using a PMT indicator (columns 2 and 5) becomes a suboptimal response (again, using the poverty gap squared as a metric). If the post-shock poor could be perfectly identified (column 3) covering them would still remain an optimal response, but now the use of a PMT delivers poor impacts because the PMT cannot identify well the new poor who fell into poverty as a consequence of the shock. In contrast, in both countries the use of an indicator of who suffered losses (either perfect or imperfect, columns 7 and 8) provides now greater poverty impacts than the use of a PMT; in fact, mixing the use of a loss indicator with the PMT does provide slightly lower impacts than using just the loss indicator, reflecting the fact that households affected by the random shock loss lose all their labor income and fall into deeper poverty than the average for the ex-ante poor. Using a flat, universal transfer remains, again, among the options delivering the lowest impacts.

Results for Albania, while overall similar, present some subtle differences. Using a loss indicator delivers slightly better impacts than using the PMT, but differences remain small. This is consistent with the fact that, if one would distribute the emergency budget to the exante poor (column 2), one would still achieve the second-highest impacts among all design alternatives – something that does not hold for Moldova and North Macedonia. A contributing factor is that labor income as reported in the survey is only one source of income for many Albanian households, and despite many households losing all their labor income from the random shock, there are still many households in extreme poverty that remain poorer than the average household affected by the shock.

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