This handbook presents a step-by-step guide to applying the incidence analysis used in the multi-country Commitment to Equity project (CEQ). We define the pre- and post-net transfers income
concepts, discuss the methodological assumptions used to construct them, explain how taxes,
subsidies and transfers should be allocated at the household level, and suggestwhat to do when the
information on taxes and transfers is not included in the household survey. We also describe the
indicators that are used to assess the distributive impact, progressivity and effectiveness of social
spending, subsidies and taxes.In addition, we present sample Stata code for producing some of the
indicators. (For more on CEQ visit www.commitmentoequity.org)