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The Aid and Maid System: South African Household Data Pitfalls

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  • Steve F Koch

Abstract

This paper presents research on South African household expenditure share behaviour. The research examines whether or not a theoretical and empirical model, which has been successful in explaining expenditure shares in Australia, is valid when applied to South African data. The primary conclusion of the research is that expenditure shares in South Africa do not conform to the assumptions set out in the model. Although there are many potential reasons for non-conformity, this paper provides evidence that the estimates produced within the AID System and the MAID System suffer from heteroskedasticity and non-normality. Therefore, in order to improve the understanding of spending behaviour by South African households, models will have to be specifically developed to deal with the idiosyncrasies of South African data.

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File URL: http://econrsa.org/home/index.php?option=com_docman&task=doc_download&gid=25&Itemid=67
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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 24.

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Length: 37 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:rza:wpaper:24

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Cited by:
  1. Steven F. Koch & Gauthier Tshiswaka-Kashalala, 2008. "Tobacco Substitution and the Poor," Working Papers 200832, University of Pretoria, Department of Economics.

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