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

Year 2018, Volume: 10 Issue: 1, 184 - 202, 01.01.2018

Paul-francois Muzindutsi

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

References

• Alkire, S., & Santos, M. E. (2014). Measuring acute poverty in the developing world: Robustness and scope of the multidimensional poverty index. World Development, 59, 251-274.
• Alkire, S., Chatterje, M., Conconi, A., Seth, S., & Vaz, A. (2014). Poverty in Rural and Urban Areas: Direct comparisons using the global MPI 2014.
• American Psychological Association (APA) (2007). Report of the APA Task Force on Socioeconomic Status. Washington, DC: American Psychological Association. http://www.apa.org/pi. Accessed 2017/02/14.
• Anyanwu, J.C. (2014). Marital status, household size and poverty in Nigeria:evidence from the 2009/2010 survey data. African Development Review, 26(1),118-137.
• Attanasio, O., & Székely, M. (1999). An asset-based approach to the analysis of poverty in Latin America.
• Barnes, M. & Lord, C. (2013). Poverty, economic status and skills: What are the links? UK: Joseph Rowntree Foundation. http://www.jrf.org.uk/sites/files/jrf/households-skills-poverty-summary.pdf. Date of access: 12 September 2015.
• Budlender, J., Leibbrandt, M., & Woolard, I. (2015). South African poverty lines: a review and two new money-metric thresholds. A Southern Africa Labour and Development Research Unit Working Paper No 151. Cape Town: SALDRU, University of Cape Town.
• Brandolini, A., Magri, S., & Smeeding, T.M. (2010). Asset􀀀based measurement of poverty. Journal of Policy Analysis and Management, 29(2), 267-284.
• Bourguignon, F. (2006). From income to endowments: the difficult task of expanding the income poverty paradigm. Poverty and inequality, 76-102.
• Bourguignon, F. & Chakravarty, S.R. (2003). The measurement of multidimensional poverty. The Journal of Economic Inequality, 1(1), 25-49.
• Connelly, R., Sullian, A & Jerrim, J. (2014). Primary and secondary education and poverty review. http://www.cls.ioe.ac.uk/librarymedia/documents/Primary%20and%20secondary%20education%20and%20poverty%20review%20August%202014.pdf. Accessed 2015/09/15.
• Cowan C.D., Hauser, M.R., Kominski, A.R & Levin, M.H. (2012). Improving the measurement of socioeconomic status for National Assessment of educational progress: A theoretical foundation. https://nces.ed.gov/nationsreportcard/pdf/researchcenter/Socioeconomic_Factors.pdf. Date of accessed 2015/08/09.
• Dunga, S.H. & Sekatane, M.B. (2014). Determinants of employment status and its relationship to poverty in Bophelong Township. Mediterranean Journal of Social Sciences, 5(21), 215-220.
• Filmer, D & Pritchett, L.H. (2001). Estimating wealth effects without expenditure data-or tears: an application to educational enrolments in states of India. http://vanneman.umd.edu/socy699J/FilmerP01.pdf. Accessed 2015/10/27.
• Gordon, D., Adelman, L., Ashworth, K., Bradshaw, J., Levitas, R., Middleton, S., Pantazis, C., Patsios, D., Payne, S., Townsend, P. & Williams, J. (2000). Poverty and social exclusion in Britain. UK: Joseph Rowntree Foundation.
• Grobler, W.C.J & Sekhampu, J. (2012). Determinants of household food expenditure among household receiving government grants in South Africa. Annual World Business Research Conference, October 2012, Bangkok, Thailand.
• Habyarimana, F., Zewotir, T., & Ramroop, S. (2015). Determinants of poverty of households in Rwanda: an application of quantile regression. Journal of Human Ecology, 50(1), 19-30.
• Hauser, R.M & Warren, J.R. (1997). Socioeconomic indexes for occupations: A review, update, and critique. Sociological Methodology, 27(1), 177-298.
• Kamuzora, C.L. (2001). Poverty and family size patterns: Comparison across African countries. REPOA Research Report No. 01.3. Dar Es Salaam: Mkuki Na Nyota Publishers.
• Oakes, J.M & Rosser.P.H. (2002). The measurement of SES in health research: current practice and steps toward a new approach. Social science & medicine, 56,767-784.
• Meyer, D. F., & Nishimwe-Niyimbanira, R. (2016). The impact of household size on poverty: An analysis of various low-income townships in the Northern Free State region, South Africa. African Population Studies, 30(2), 2283-2295.
• Sadeghi, J. M. (2001). Determinants of Poverty in Rural Areas: Case of Savejbolagh Farmers in Iran, World Bank Working Papers 0112.
• Saghir, J. and Santoro, J. (2018). Urbanization in Sub-Saharan Africa: Meeting Challenges by Bridging Stakeholders Center for Strategic and International Studies (CSIS). https://www.csis.org/analysis/urbanization-sub-saharan-africa. Accessed 2018/06/02.
• Scott, J. (2002). Social class and stratification in late modernity. Acta Sociologica, 45(1), 23-35.
• Sekhampu, T. J. (2013). Determinants of poverty in a South African township.Journal of Social Sciences, 34(2), 145-153.
• Sekhampu, T.J. & Muzindutsi, P.F. (2014). Gender Analysis of Household Poverty–An Empirical Analysis. Studia Universitatis Babes-Bolyai, Oeconomica, 59(1), 44-56.
• Suryadarma, D., & Suryahadi, A. (2009). The contrasting role of ability and poverty on education attainment: evidence from Indonesia. SMERU Working Paper. SMERU Research Institute.
• Vyas, S., & Kumaranayake, L. (2006). Constructing socio-economic status indices: how to use principal components analysis. Health policy and planning, 21(6), 459-468.
• World Bank (2005). Introduction to Poverty Analysis. Washington, DC: World Bank Group.
• World Bank (2017). The Development Indicators (WDI) 2017 Maps. https://data.worldbank.org/products/wdi-maps. Accessed 2018/05/06.