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Consumer Indebtedness Among Urban South African Households: A Descriptive Overview

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  • Reza Daniels

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

Abstract

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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    File Function: First version, 2001
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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.
    2. Daryl Collins, 2008. "Debt and household finance: evidence from the Financial Diaries," Development Southern Africa, Taylor & Francis Journals, vol. 25(4), pages 469-479.

    More about this item

    Keywords

    South Africa: consumption schedule; consumer indebtedness;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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