IDEAS home Printed from https://ideas.repec.org/p/ady/wpaper/edwrg-02-2022.html
   My bibliography  Save this paper

Determinants of Subjective Poverty in Rural and Urban Areas of South Africa

Author

Listed:
  • Santos Bila

    (College of Business and Economics, University of Johannesburg)

  • Mduduzi Biyase

    (College of Business and Economics, University of Johannesburg)

Abstract

This paper extends the investigation from objective to subjective poverty, an issue that has received inadequate attention in South Africa. The empirical analysis based on the fixed effects two-stage least squares (FE-2SLS) and Living Condition Survey (LSC) reveal that household size, being male, being married or divorced, holding primary and tertiary education are strong predictors of subjective poverty across sub-samples. However, the determinants of rural subjective poverty are slightly different to the determinants of urban subjective poverty. For example, owning a piece of land appear to be important in explaining poverty in the rural sample, contrary to the urban sample. Moreover, we find that health and unemployment are strong predictors of urban sample, while they are not significant for the rural sample. The results have important implications for policy intervention. It suggests that land is still an important component of diverse livelihoods for rural people and can assist rural emerging farmers to be involved in large-scale farming.

Suggested Citation

  • Santos Bila & Mduduzi Biyase, 2022. "Determinants of Subjective Poverty in Rural and Urban Areas of South Africa," Economics Working Papers edwrg-02-2022, College of Business and Economics, University of Johannesburg, South Africa, revised 2022.
    • Handle: RePEc:ady:wpaper:edwrg-02-2022
    as

    Download full text from publisher

    File URL: https://edwrg.education/RePEc/ady/wpaper/w2_2022.pdf
    File Function: First version, 2022
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mduduzi Biyase & Talent Zwane, 2018. "An Empirical Analysis Of The Determinants Of Poverty And Household Welfare In South Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 52(1), pages 115-130, January-M.
    2. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
    3. Aliber, Michael, 2003. "Chronic Poverty in South Africa: Incidence, Causes and Policies," World Development, Elsevier, vol. 31(3), pages 473-490, March.
    4. Gero Carletto & Alberto Zezza, 2006. "Being poor, feeling poorer: Combining objective and subjective measures of welfare in Albania," Journal of Development Studies, Taylor & Francis Journals, vol. 42(5), pages 739-760.
    5. Vusi Gumede, 2021. "Revisiting Poverty, Human Development and Inequality in Democratic South Africa," Indian Journal of Human Development, , vol. 15(2), pages 183-199, August.
    6. Fintel, Dieter von & Fourie, Johan, 2019. "The great divergence in South Africa: Population and wealth dynamics over two centuries," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 759-773.
    7. Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
    8. Diane Colasanto & Arie Kapteyn & Jacques van der Gaag, 1984. "Two Subjective Definitions of Poverty: Results from the Wisconsin Basic Needs Study," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 127-138.
    9. Almas Heshmati & Esfandiar Maasoumi & Guanghua Wan, 2019. "An Analysis of the Determinants of Household Consumption Expenditure and Poverty in India," Economies, MDPI, vol. 7(4), pages 1-27, September.
    10. Theo Goedhart & Victor Halberstadt & Arie Kapteyn & Bernard van Praag, 1977. "The Poverty Line: Concept and Measurement," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 503-520.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Knight, John & Gunatilaka, Ramani, 2012. "Income, aspirations and the Hedonic Treadmill in a poor society," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 67-81.
    2. Tomáš Želinský & Martina Mysíková & Thesia I. Garner, 2022. "Trends in Subjective Income Poverty Rates in the European Union," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(5), pages 2493-2516, October.
    3. Giuseppina Guagnano & Elisabetta Santarelli & Isabella Santini, 2016. "Can Social Capital Affect Subjective Poverty in Europe? An Empirical Analysis Based on a Generalized Ordered Logit Model," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(2), pages 881-907, September.
    4. Bernard M. S. van Praag & Nico L. van der Sar, 1988. "Household Cost Functions and Equivalence Scales," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 193-210.
    5. Andrew E. Clark & Claudia Senik, 2010. "Will GDP growth increase happiness in developing countries?," PSE Working Papers halshs-00564985, HAL.
    6. Gustafsson, Björn Anders & Yue, Ximing, 2006. "Rural People’s Perception of Poverty in China," IZA Discussion Papers 2486, Institute of Labor Economics (IZA).
    7. Zsoka Koczan, 2022. "Perceptions of economic well‐being in the Western Balkans," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(4), pages 845-867, October.
    8. Maria Cracolici & Francesca Giambona & Miranda Cuffaro, 2014. "Family Structure and Subjective Economic Well-Being: Some New Evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 433-456, August.
    9. Arie Kapteyn & Peter Kooreman & Rob Willemse, 1988. "Some Methodological Issues in the Implementation of Subjective Poverty Definitions," Journal of Human Resources, University of Wisconsin Press, vol. 23(2), pages 222-242.
    10. Bernard M.S. van Praag, 2004. "The Connexion Between Old and New Approaches to Financial Satisfaction," CESifo Working Paper Series 1212, CESifo.
    11. Cristina Sechel, 2019. "Happier Than Them, but More of Them Are Happy:Aggregating Subjective Well-Being," Working Papers 2019008, The University of Sheffield, Department of Economics.
    12. Thesia I. Garner & Kathleen Short, 2005. "Economic Well-Being Based on Income, Consumer Expenditures and Personal Assessments of Minimal Needs," Working Papers 381, U.S. Bureau of Labor Statistics.
    13. Yoram Amiel, 1998. "The Subjective Approach to the Measurement of Income Inequality (published in Handbook of Income Inequality Measurement, J Silber (ed), Kluwer Academic Publishers (1999), pp.227-241)," STICERD - Distributional Analysis Research Programme Papers 38, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    14. Pradhan, Menno & Ravallion, Martin, 1998. "Measuring poverty using qualitative perceptions of welfare," Policy Research Working Paper Series 2011, The World Bank.
    15. Tine Stanovnik & Miroslav Verbic, 2004. "Perception of Income Satisfaction: An Analysis of Slovenian Households," HEW 0408003, University Library of Munich, Germany.
    16. Ravallion, Martin, 2012. "Poor, or just feeling poor ? on using subjective data in measuring poverty," Policy Research Working Paper Series 5968, The World Bank.
    17. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2006. "Income and happiness: Evidence, explanations and economic implications," PSE Working Papers halshs-00590436, HAL.
    18. Bronfman, Javier, 2007. "Poverty Lines, What are they telling us?," MPRA Paper 63263, University Library of Munich, Germany, revised 15 Apr 2009.
    19. Gardes, François & Merrigan, Philip, 2008. "Individual needs and social pressure: Evidence on the Easterlin hypothesis using repeated cross-section surveys of Canadian households," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 582-596, June.

    More about this item

    Keywords

    Determinants; location; fixed effect instrumental variable; Subjective poverty;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ady:wpaper:edwrg-02-2022. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Frederich Kirsten (email available below). General contact details of provider: https://www.uj.ac.za/edwrg .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.