A COMPARATIVE ANALYSIS OF INCOME- AND ASSET-BASED POVERTY MEASURES OF HOUSEHOLDS IN A TOWNSHIP IN SOUTH AFRICA

Abstract

Poverty alleviation is an essential goal for policy-makers. As a result, the development of an accurate measure of poverty is a key step to conceptualise the poverty phenomenon. Several measures for evaluating poverty exist but most of these measures cannot be generalised as they tend to be area- and communityspecific. This study compared the use of the income- and asset-based measures to determine the poverty status of households in a South African Township. A quantitative research approach, utilising a survey questionnaire, was adopted to collect data from 364 households in year 2015. The income-based poverty was measured using the Household Subsistence Level (HSL); while Principal Component Analysis (PCA) was applied to determine the asset-based poverty status. The Analysis of Variance (ANOVA) was used to assess whether there is a significant difference between the results of these two measures of poverty. A binary logistic regression model was used subsequently to determine to what extent a set of demographic variables influence the poverty status. Results revealed that the levels of poverty status tend to be high when the income-based poverty is used but the difference between the results of the two measures of poverty was found to be not statistically significant. The key determinants of asset-based poverty status in the selected Township include the marital status of the household head, the household size and receipt of a social grant. This study concludes that, in the absence of the income, the asset index can be used as measurement of poverty in low income areas.

Keywords

• Poverty status,Poverty measures,Asset Index,Socio-economic status

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