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Asset-based versus money metric poverty indices in South Africa: An assessment using the Chronic Poverty Research Centre RSA 2002 Survey

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  • David Crosoer
  • Murray Leibbrandt

    ()
    (SALDRU, School of Economics, University of Cape Town)

  • Ingrid Woolard

    ()
    (SALDRU, School of Economics, University of Cape Town)

Abstract

Using data from a detailed chronic poverty survey of three South African communities, this paper compares the correlations between traditional (i.e. income and expenditure) and wealth-based measures of poverty in ranking households as poor as well as their ability to explain additional qualitative measures of persistent poverty such as household hunger. We find significant locational differences in terms of the composition of household wealth measures and this complicates the derivation of appropriate wealth indices. Traditional money-metric measures of poverty that abstract from location appear to explain short-term measures of deprivation like household hunger relatively well, and consistently capture the bottom and top deciles of the distribution. On their own wealth-based measures appear less suited to explaining household hunger, suggesting more liquid based measures for short-term indicators are more appropriate.

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Bibliographic Info

Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU/CSSR Working Papers with number 109.

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Date of creation: 2005
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Handle: RePEc:ldr:cssrwp:109

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  1. Howard White, 2005. "Combining the Quantitative and Qualitative Approaches to Poverty Measurement and Analysis," Development and Comp Systems 0505003, EconWPA.
  2. Filmer, Deon & Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
  3. Woolard, Ingrid & Klasen, Stephan, 2004. "Determinants of Income Mobility and Household Poverty Dynamics in South Africa," IZA Discussion Papers 1030, Institute for the Study of Labor (IZA).
  4. Aliber, Michael, 2003. "Chronic Poverty in South Africa: Incidence, Causes and Policies," World Development, Elsevier, vol. 31(3), pages 473-490, March.
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