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Consumer Indebtedness Among Urban South African Households: A Descriptive Overview


  • Reza Daniels

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


This working paper analyses consumer indebtedness among urban South African households. The theoretical basis of the topic lies within consumption theory, and the empirical exercises are conducted on Part Two of the October Household Survey – the Income and Expenditure Survey (Statistics South Africa, 1995) and an adjusted 1999 dataset constructed by Wefa Southern Africa. The primary objective of the paper is to provide a descriptive overview of urban household indebtedness; consequently, we are concerned only with the basic relationships of consumer theory, namely the composition of income and consumption. The results indicate that (1) at the national level, indebtedness trends upwards as income increases while cashflow trends towards a decrease as income increases; (2) there are predictable, Engel’s law consumption patterns amongst the poor and the rich; (3) the composition and sources of debt vary widely between the poor and the rich; (4) between 1995 and 1999, household indebtedness generally increased while household cashflow generally decreased; also, important substitution shifts took place in the consumption schedule, with a greater proportion of income being spend on housing and food.

Suggested Citation

  • Reza Daniels, 2001. "Consumer Indebtedness Among Urban South African Households: A Descriptive Overview," Working Papers 01055, University of Cape Town, Development Policy Research Unit.
  • Handle: RePEc:ctw:wpaper:01055

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    References listed on IDEAS

    1. David Lam & Robert F. Schoeni, 1994. "Family Ties and Labor Markets in the United States and Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 1235-1258.
    2. Lam, David & Schoeni, Robert F, 1993. "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 710-740, August.
    3. Maglad, N.A., 1998. "Female Labour Supply in Sudan," Papers 30s, African Economic Research Consortium.
    4. Murray Leibbrandt & Haroon Bhorat, 1999. "Modelling Vulnerability and Low Earnings in the South African Labour Market," Working Papers 99032, University of Cape Town, Development Policy Research Unit.
    5. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-799, July.
    6. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, September.
    7. Dilnot, Andrew & Duncan, Alan, 1992. "Thinking about labour supply," Journal of Economic Psychology, Elsevier, vol. 13(4), pages 687-713, December.
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    Cited by:

    1. Francis Nathan Okurut, 2006. "Access to credit by the poor in South Africa: Evidence from Household Survey Data 1995 and 2000," Working Papers 13/2006, Stellenbosch University, Department of Economics.

    More about this item


    South Africa: consumption schedule; consumer indebtedness;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics


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