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The Sensitivity of Estimates of Post-Apartheid Changes in South African Poverty and Inequality to key Data Imputations

Author

Listed:
  • Cally Ardington

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

  • David Lam

    () (Economics Department, University of Michigan)

  • Murray Leibbrandt

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

  • Matthew Welch

    () (DataFirst, University of Cape Town)

Abstract

We begin by summarising the literature that has assessed medium-run changes in poverty and inequality in South Africa using census data. According to this literature, over the 1996 to 2001 period both poverty and inequality increased. In this paper we assesses the robustness of these results to the large percentage of individuals and households in both censuses for whom personal income data is missing and to the fact that personal income is collected in income bands rather than as point estimates. First, we use a sequential regression multiple imputation approach to impute missing values for the 2001 census data. Relative to the existing literature, the imputation results lead to estimates of mean income and inequality (as measured by the Gini coefficient) that are higher and estimates of poverty that are lower. This is true even accounting for the wider confidence intervals that arise from the uncertainty that the imputations bring into the estimation process. Next we go on to assess the influence of dubious zero values by setting them to missing and re-doing the multiple imputation process. This increases the uncertainty associated with the imputation process as reflected in wider confidence intervals on all estimates and only the Gini coefficient is significantly different from the first set of estimated parameters. The final imputation exercise assesses the sensitivity of results to the practice of taking personal incomes recorded in bands and attributing band midpoints to them. We impute an alternative set of intra-band point incomes by replicating the intra-band empirical distribution of personal incomes from a national income and expenditure survey undertaken in the year before each census. Using the empirical distributions increases estimated inequality although the differences are relatively small. We finish our empirical work with a discussion of provincial poverty shares as a policy relevant illustration of the importance of dealing with missing values. Overall our results for 1996 and 2001 confirm the major findings from the existing literature while generating more reliable confidence intervals for the key parameter of interest than are available elsewhere.

Suggested Citation

  • 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.
  • Handle: RePEc:ldr:cssrwp:106
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    References listed on IDEAS

    as
    1. Murray Leibbrandt & Laura Poswell & Pranushka & Matthew Welch & Ingrid Woolard, 2004. "Measuring recent changes in South African inequality and poverty using 1996 and 2001 census data," SALDRU/CSSR Working Papers 084, Southern Africa Labour and Development Research Unit, University of Cape Town.
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    Citations

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    Cited by:

    1. Tregenna, Fiona, 2011. "Halving Poverty in South Africa: Growth and Distributional Aspects," WIDER Working Paper Series 060, World Institute for Development Economic Research (UNU-WIDER).
    2. Charles Meth, 2007. "Flogging a dead horse: Attempts by van der Berg et al to measure changes in poverty and inequality," SALDRU Working Papers 9, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Ardington, Cally & Lam, David & Leibbrandt, Murray & Welch, Matthew, 2006. "The sensitivity to key data imputations of recent estimates of income poverty and inequality in South Africa," Economic Modelling, Elsevier, vol. 23(5), pages 822-835, September.
    4. Murray Leibbrandt & James Levinsohn & Justin McCrary, 2005. "Incomes in South Africa Since the Fall of Apartheid," NBER Working Papers 11384, National Bureau of Economic Research, Inc.
    5. Derek Yu, 2013. "Poverty and inequality estimates of National Income Dynamics Study revisited," Working Papers 05/2013, Stellenbosch University, Department of Economics.
    6. 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, March.
    7. Fiona Tregenna, 2012. "What are the distributional implications of halving poverty in South Africa when growth alone is not enough?," Applied Economics, Taylor & Francis Journals, vol. 44(20), pages 2577-2596, July.
    8. Servaas van der Berg & Ronelle Burger & Rulof Burger & Megan Louw & Derek Yu, 2005. "Trends in poverty and inequality since the political transition," Working Papers 01/2005, Stellenbosch University, Department of Economics.
    9. Nicola Branson, 2009. "Re-weighting the OHS and LFS National household Survey Data to create a consistent series over time: A Cross Entropy Estimation Approach," SALDRU Working Papers 38, Southern Africa Labour and Development Research Unit, University of Cape Town.
    10. Derek Yu, 2013. "Some factors influencing the comparability and reliability of poverty estimates across household surveys," Working Papers 03/2013, Stellenbosch University, Department of Economics.
    11. Leibbrandt Murray & Levinsohn James A & McCrary Justin, 2010. "Incomes in South Africa after the Fall of Apartheid," Journal of Globalization and Development, De Gruyter, vol. 1(1), pages 1-62, January.
    12. Nicola Branson & Martin Wittenberg, 2014. "Reweighting South African National Household Survey Data to Create a Consistent Series Over Time: A Cross-Entropy Estimation Approach," South African Journal of Economics, Economic Society of South Africa, vol. 82(1), pages 19-38, March.
    13. Miquel Pellicer & Vimal Ranchhod & Mare Sarr & Eva Wegner, 2011. "Inequality Traps in South Africa: An overview and research agenda," SALDRU Working Papers 57, Southern Africa Labour and Development Research Unit, University of Cape Town.
    14. Haroon Bhorat & Benjamin Stanwix & Derek Yu, 2014. "Non-Income Welfare And Inclusive Growth In South Africa," Working Papers 201407, University of Cape Town, Development Policy Research Unit.
    15. Wilkinson, Kate, 2009. "Adapting EUROMOD for use in a developing country - the case of South Africa and SAMOD," EUROMOD Working Papers EM5/09, EUROMOD at the Institute for Social and Economic Research.
    16. Derek Yu, 2008. "The comparability of Income and Expenditure Surveys 1995, 2000 and 2005/2006," Working Papers 11/2008, Stellenbosch University, Department of Economics.

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