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Estimating a poverty line: An application to free basic municipal services in South Africa


  • Haroon Bhorat
  • Morne Oosthuizen
  • Carlene Van Der Westhuizen

    () (Development Policy Research Unit
    Director and Professor)


One of the key interventions aimed at improving the welfare of South African households has been local government’s provision of a package of free basic services (FBS) to poor households. It is, however, not completely clear how different municipalities identify households which are eligible for FBS. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 per month. This “FBS poverty line” is, however, low in comparison with a number of unofficial poverty lines utilised by policymakers and researchers in South Africa. This paper considers the impact of increasing the value of the FBS line, both in terms of the additional share and number of households eligible for support as well as the additional financial cost. We find that urban municipalities will face the steepest increases in their FBS budgets with any potential increase in the FBS poverty line.

Suggested Citation

  • Haroon Bhorat & Morne Oosthuizen & Carlene Van Der Westhuizen, 2011. "Estimating a poverty line: An application to free basic municipal services in South Africa," Working Papers 11142, University of Cape Town, Development Policy Research Unit.
  • Handle: RePEc:ctw:wpaper:11142

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    References listed on IDEAS

    1. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, vol. 53(3), pages 367-394, March.
    2. Kalie Pauw & Liberty Mncube, 2007. "Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints," Working Papers 07127, University of Cape Town, Development Policy Research Unit.
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    More about this item


    free basic services; poverty line; municipal services; South Africa;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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