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Expenditure patterns and elasticities of rural households sampled in two communal areas of KwaZulu-Natal

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  • Sheryl Hendriks
  • Michael Lyne

Abstract

Expenditure patterns among a sample of 99 rural households in two communal districts in KwaZulu-Natal were investigated to determine the potential impact of a widespread income shock on household expenditure. The results showed expenditure elasticities of close to unity for food. Low elasticities were found for staple foods. Elasticities for meat, meat products and poultry were close to unity, while horticultural products showed the greatest potential for demand growth within the food category. Of the statistically significant commodity categories, expenditure elasticities for durables, housing and transport were more than double those estimated for the aggregate food category. For consumer items, the district expenditure elasticities were estimated to be 0,76 and 0,71, while expenditure on social obligations would not increase with rural incomes. Wealthier households (the top expenditure decile) have a greater propensity for increased expenditure on transport, while poorer households show a greater propensity for increased expenditure on housing and durables. Although agriculture has the potential to generate widespread growth in rural incomes, the preference for manufactured goods casts some doubt on the strength of consumption multipliers for locally produced farm and non-farm goods in rural KwaZulu-Natal.

Suggested Citation

  • Sheryl Hendriks & Michael Lyne, 2003. "Expenditure patterns and elasticities of rural households sampled in two communal areas of KwaZulu-Natal," Development Southern Africa, Taylor & Francis Journals, vol. 20(1), pages 105-127.
    • Handle: RePEc:taf:deveza:v:20:y:2003:i:1:p:105-127
    DOI: 10.1080/0376835032000065516
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    Cited by:

    1. Saari, M. Yusof & Dietzenbacher, Erik & Los, Bart, 2014. "Production interdependencies and poverty reduction across ethnic groups in Malaysia," Economic Modelling, Elsevier, vol. 42(C), pages 146-158.
    2. Browne, M. & Ortmann, Gerald F. & Hendriks, Sheryl L., 2007. "Expenditure elasticities for rural households in the Embo ward, Umbumbulu, KwaZulu-Natal," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), pages 1-18, December.
    3. Shinns, L.H. & Lyne, Michael C., 2004. "Symptoms of poverty within a group of land reform beneficiaries in the Midlands of KwaZulu-Natal: Analysis and policy recommendations," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 43(1), pages 1-15, March.
    4. Isoto, Rosemary E. & Kraybill, David S. & Erbaugh, Mark J., 2014. "Impact of integrated pest management technologies on farm revenues of rural households: The case of smallholder Arabica coffee farmers," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(2), pages 1-13, April.

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