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Flogging a dead horse: Attempts by van der Berg et al to measure changes in poverty and inequality

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  • Charles Meth

Abstract

This paper seeks an explanation for the large differences in the extent and severity of poverty published respectively in van der Berg et al (2005: 2007a) and Meth (2006b). Headcounts in 2004 suggested by van der Berg et al (2007a) exceed by five million, those reported by (Meth, 2006b). Household survey respondents often under-report income (and expenditure). To address this, it is common (if not necessarily wise) to scale household survey income means until the grossed-up survey income totals are approximately the same as those yielded by the national accounts. The apparent reason for the differences between our respective poverty estimates lies in the poor quality of the income estimates in the surveys used by van der Berg et al as primary data source for estimating income distributions (by race). Scaling these survey estimates to make them consistent with the national accounts, it is argued, causes them to under-estimate the extent and severity of the poverty problem. As part of their analysis of changes in the welfare of Africans in South Africa since the advent of democracy (and in support of their claim that poverty has fallen), van der Berg et al attempt to measure changes in the racial shares of remuneration. The present paper ends with a brief examination of some of the problems of doing so using Statistics South Africa household surveys (the Labour Force Surveys) as primary data source. Welcomed by government because of the apparent progress they report in the fight against poverty, the possible consequences for anti-poverty policy (and for the poor) of the van der Berg et al figures being wrong are non-trivial.

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Bibliographic Info

Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU Working Papers with number 9.

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Length: 24 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:ldr:wpaper:9

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  1. Servaas Van Der Berg & Megan Louw, 2004. "Changing Patterns Of South African Income Distribution: Towards Time Series Estimates Of Distribution And Poverty," South African Journal of Economics, Economic Society of South Africa, vol. 72(3), pages 546-572, 09.
  2. Charles Meth, 2007. "Sticking to the Facts: Official and Unofficial Stories about Poverty and Unemployment in South Africa," Working Papers 07123, University of Cape Town, Development Policy Research Unit.
  3. Cally Ardington & David Lam & Murray Leibbrandt & Matthew Welch, 2005. "The Sensitivity of Estimates of Post-Apartheid Changes in South African Poverty and Inequality to key Data Imputations," SALDRU/CSSR Working Papers 106, Southern Africa Labour and Development Research Unit, University of Cape Town.
  4. Charles Meth, 2006. "What was the poverty headcount in 2004 and how does it compare to recent estimates by van der Berg et al?," SALDRU Working Papers 1, Southern Africa Labour and Development Research Unit, University of Cape Town.
  5. Servaas Van der berg & Megan Louw & Derek Yu, 2008. "Post-Transition Poverty Trends Based On An Alternative Data Source," South African Journal of Economics, Economic Society of South Africa, vol. 76(1), pages 58-76, 03.
  6. Servaas van der Berg & Ronelle Burger & Rulof Burger & Megan Louw & Derek Yu, 2007. "A series of national accounts-consistent estimates of poverty and inequality in South Africa," Working Papers 09/2007, Stellenbosch University, Department of Economics.
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Cited by:
  1. Charles Meth, 2011. "How not to present poverty research results: The South African case," SALDRU Working Papers 61, Southern Africa Labour and Development Research Unit, University of Cape Town.

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