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South African poverty lines: a review and two new money-metric thresholds

Author

Listed:
  • Josh Budlender

    (School of Economics, University of Cape Town)

  • Murray Leibbrandt

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

  • Ingrid Woolard

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

Abstract

Unlike some other countries, there is no legislated poverty line for South Africa. Various absolute poverty lines exist, but there has been little analysis of the methodological decisions underpinning each line. There is no consensus as to which line is best. This paper critically reviews existing South African poverty lines and introduces two new money-metric thresholds. These poverty lines are created according to Ravallion's (1994) Cost of Basic Needs method and use a combination of household survey data, caloric information for various foods, and price data. Our methodology is described in depth, and the implications of unavoidable methodological decisions are discussed. The theoretical foundations of the method are also examined, and it is argued that the lower-bound poverty line is not conceptually coherent and is not appropriate for poverty measurement. The upper-bound and food poverty lines remain worthwhile, however. The implications of these lines for rudimentary estimates of poverty are then examined, using the 2010/2011 Income and Expenditure Survey.

Suggested Citation

  • Josh Budlender & Murray Leibbrandt & Ingrid Woolard, 2015. "South African poverty lines: a review and two new money-metric thresholds," SALDRU Working Papers 151, Southern Africa Labour and Development Research Unit, University of Cape Town.
  • Handle: RePEc:ldr:wpaper:151
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    File URL: http://opensaldru.uct.ac.za/bitstream/handle/11090/784/2015_151_Saldruwp.pdf?sequence=1
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    References listed on IDEAS

    as
    1. Ravallion, M., 1998. "Poverty Lines in Theory and Practice," Papers 133, World Bank - Living Standards Measurement.
    2. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 476-487, August.
    3. Martin Ravallion & Shaohua Chen, 2011. "Weakly Relative Poverty," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1251-1261, November.
    4. Greer, Joel & Thorbecke, Erik, 1986. "A methodology for measuring food poverty applied to Kenya," Journal of Development Economics, Elsevier, vol. 24(1), pages 59-74, November.
    5. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," World Bank Economic Review, World Bank Group, vol. 8(1), pages 75-102, January.
    6. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101, August.
    7. Jonathan Haughton & Shahidur R. Khandker, 2009. "Handbook on Poverty and Inequality," World Bank Publications, The World Bank, number 11985, August.
    8. Posel, Dorrit & Rogan, Michael, 2014. "Measured as poor versus feeling poor: Comparing objective and subjective poverty rates in South Africa," WIDER Working Paper Series 133, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Haroon Bhorat & Adaiah Lilenstein & Jabulile Monnakgotla & Amy Thornton, 2017. "The Socio-Economic Determinants of Crime in South Africa: An Empirical Assessment," Working Papers 201704, University of Cape Town, Development Policy Research Unit.
    2. Rocco Zizzamia & Simone Schotte & Murray Leibbrandt & Vimal Ranchhod, 2016. "Vulnerability and the Middle Class in South Africa," SALDRU Working Papers 188, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Aalia Cassim & Kezia Lilenstein & Morné Oosthuizen & Francois Steenkamp, 2016. "Informality and Inclusive Growth in Sub-Saharan Africa," Working Papers 201602, University of Cape Town, Development Policy Research Unit.
    4. Arden Finn & Murray Leibbrandt, 2016. "The dynamics of poverty in the first four waves of NIDS," SALDRU Working Papers 174, Southern Africa Labour and Development Research Unit, University of Cape Town.
    5. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    6. Haroon Bhorat & Kezia Lilenstein & Morné Oosthuizen & Amy Thornton, 2016. "Vulnerability In Employment: Evidence from South Africa," Working Papers 201604, University of Cape Town, Development Policy Research Unit.
    7. Arden Finn, 2015. "A National Minimum Wage in the Context of the South African Labour Market," SALDRU Working Papers 153, Southern Africa Labour and Development Research Unit, University of Cape Town.

    More about this item

    Keywords

    Poverty; South Africa; food poverty lines;

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