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

Type Working Paper
Title South African poverty lines: a review and two new money-metric thresholds
Author(s)
Publication (Day/Month/Year) 2015
URL http://opensaldru.uct.ac.za/bitstream/handle/11090/784/2015_151_Saldruwp.pdf?sequence=1
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.

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