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Estimating a poverty line: An application to free basic municipal services in South Africa

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  • Haroon Bhorat
  • Morne Oosthuizen
  • Carlene van der Westhuizen

Abstract

One of the key interventions aimed at improving the welfare of South African households has been local government's provision of a package of free basic municipal services to poor households. It is, however, not completely clear how different municipalities identify households that are eligible for these services. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 a month. This ‘free basic services poverty line’ is, however, low in comparison with a number of unofficial poverty lines used by policymakers and researchers in South Africa. This paper considers the impact of increasing the value of the free basic services line, in terms of the additional share and number of households eligible for support and the additional financial cost. We find that urban municipalities would face the steepest increases in their free basic services budgets with any potential increase in the free basic services poverty line.

Suggested Citation

  • Haroon Bhorat & Morne Oosthuizen & Carlene van der Westhuizen, 2012. "Estimating a poverty line: An application to free basic municipal services in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 29(1), pages 77-96, March.
    • Handle: RePEc:taf:deveza:v:29:y:2012:i:1:p:77-96
    DOI: 10.1080/0376835X.2012.645643
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    References listed on IDEAS

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    1. Chaudhuri, Shubham & Ravallion, Martin, 1994. "How well do static indicators identify the chronically poor?," Journal of Public Economics, Elsevier, vol. 53(3), pages 367-394, March.
    2. Kalie Pauw & Liberty Mncube, 2007. "Expanding the Social Security Net in South Africa: Opportunities, Challenges and Constraints," Working Papers 07127, University of Cape Town, Development Policy Research Unit.
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