<!-- Start of picture text --> NUTS 3 CAP regressions (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)<br>LABELS Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate Poverty rate<br>Payment (Total) 1.95e-09**<br>Payment per capita (Total) 0.000472**<br>Payment (pillar1) 1.95e-09**<br>Payment per capita (pillar1) 0.000433*<br>Payment share (pillar1) -0.00773<br>Payment (pillar2) 8.26e-09**<br>Payment per capita (pillar2) 0.00325**<br>Payment share (pillar2) 0.00773<br>Payment (pillar1 coupled) 1.66e-09<br>Payment per capita (pillar1 coupled) 0.00108<br>Payment share (pillar1 coupled) 0.000739<br>Payment (pillar1 decoupled) 2.56e-09**<br>Payment per capita (pillar1 decoupled) 0.000541*<br>Payment share (pillar1 decoupled) 0.00195<br>GDP per capita (PPS) -0.000154** -0.000151** -0.000155** -0.000153** -0.000158** -0.000153** -0.000150** -0.000158** -0.000158** -0.000157** -0.000158** -0.000154** -0.000152** -0.000158**<br>Population density 0.113** 0.111** 0.112** 0.109** 0.0990** 0.106** 0.113** 0.0990** 0.102** 0.103** 0.100** 0.114** 0.110** 0.103**<br>Country fixed effects Y Y Y Y Y Y Y Y Y Y Y Y Y Y<br>Constant 17.54** 17.23** 17.79** 17.65** 18.60** 17.14** 15.68** 17.83** 18.15** 18.01** 18.19** 17.72** 17.60** 18.10**<br>Observations 1,181 1,181 1,184 1,184 1,181 1,181 1,181 1,181 1,181 1,181 1,181 1,184 1,184 1,181<br>Adj R-Squared 0.368 0.364 0.363 0.360 0.359 0.372 0.371 0.359 0.359 0.360 0.359 0.365 0.360 0.359<br>Note: (1) Data source: EU 2011 Poverty Map (DG-REGIO and World Bank), 2010 Farm Structure Survey (Eurostat), and EU National Statistic Institutes (Eurostat); (2) Symbols: ** p<0.01, * p<0.05, + p<0.1; (3)<br>Missing observations in CAP data are treated as zero; (4) Luxembourg and Cyprus Republic are not being analyzed here;(5) CAP data is missing for 21 regions in Croatia and 2 regions in Spain (with 1 more region missing<br>for Pillar 2 data); (6) Standard errors are clustered at country level<br><!-- End of picture text --> Table 6 above indicates that, overall, the CAP funds seem to be reaching poorer areas within the EU. Starting with total CAP payments, a positive and significant relationship with poverty rate is observed. Further disaggregating the total payments into the two CAP pillars supports this result, as both pillars, when individually analyzed, remain significantly associated to poverty rates. When analyzing pillar 1 by its individual components, the decoupled payments remain significantly and positively associated with poverty rate. These results remain when analyzing each of these components on a per capita level. Therefore, CAP funds do tend to reach regions where higher poverty rates prevail. Nevertheless, it is important to keep in mind that CAP payments reaching poor areas do not imply they are necessarily reaching the poorest households within those areas.

We continue our analysis by assessing the relationship between CAP payments and poverty, but now turning to the share of the countries’ poor as the measure for poverty. Table 7 below presents the results obtained, which are similar to the ones previously presented using the poverty rate. Total CAP payments are significantly and positively associated with the share of the country’s poor. Similarly, for the specifications including each of the CAP’s pillars, we observe the same significant and positive association. In this case, both components of pillar 1, coupled and decoupled payments, seem to be reaching areas where there is a high share of the country’s poor population.

**Table 7.** CAP payments

||(1)<br>Share of|(2)<br>Share of|(3)<br>Share of|(4)<br>Share of|(5)<br>Share of|(6)<br>Share of|(8)<br>Share of|(10)<br>Share of|(12)<br>Share of|(14)<br>Share of|(16)<br>Share of|(18)<br>Share of|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||country|country|country|country|country|country|country|country|country|country|country|country|
|LABELS|poor|poor|poor|poor|poor|poor|poor|poor|poor|poor|poor|poor|
|Total CAP payments|1.46e-09**|1.45e-09**|||||||||||
|Payments for pillar1|||1.39e-09**|1.83e-09**|||||||||
|Payments for pillar2|||||6.73e-09*|6.11e-09*|||||||
|Payments for pillar1 coupled|||||||4.46e-09*||||||
|Payments for pillar1 decoupled||||||||2.04e-09**|||||
|Payments for investment aids budgets|||||||||1.08e-08**||||
|Payments for LFA budgets||||||||||2.22e-08+|||
|Payments for Agri-environmental budgets|||||||||||2.00e-08**||
|Payments for pillar2 other||||||||||||1.82e-08**|
|Population density(Inhabitants per hectare);||0.0571*||0.0511*||0.0527*|0.0427*|0.0525*|0.0534+|0.0460*|0.0483*|0.0416*|
|Gross Domestic Product(PPS per inhabitant)||6.98e-06||9.42e-06||7.18e-06|6.28e-06|9.64e-06|7.89e-06|6.21e-06|1.12e-05|-3.93e-06|
|Poverty line||0.000804**||0.000765**||0.000664**|0.000702**|0.000776**|0.000725**|0.000579**|0.000600**|0.000704**|
|Number of zero-benefitiary budgets||0.0246+||0.00257||0.0243*|-0.0140|-0.479|0.0345+|0.121+|0.0524|0.212+|
|Constant|2.476**|-11.33**|2.647**|-9.422**|2.123**|-9.474**|-8.189**|-9.595**|-10.19**|-7.082**|-8.160**|-8.186**|
|Country fixed effects|Y|Y|Y|Y|Y|Y|Y|Y|Y|Y|Y|Y|
|Observations|1,181|1,181|1,181|1,181|1,181|1,181|1,181|1,182|1,181|1,181|1,181|1,181|
|Adj R-squared|0.566|0.599|0.561|0.577|0.575|0.604|0.571|0.576|0.595|0.595|0.587|0.587|

Note: (1) Data source: EU 2011 Poverty Map (DG-REGIO and World Bank), 2010 Farm Structure Survey (Eurostat), and EU National Statistic Institutes (Eurostat); (2) Symbols: ** p<0.01, * p<0.05, + p<0.1; (3) Missing observations in agricultural indicators are treated as zero;(4) Luxembourg and Cyprus Republic are not being analyzed here;(5) CAP payment data in Croatia, 5 regions in Estonia and 1 region in France (Seine-Saint-Denis) is missing; 13