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Measured as Poor versus Feeling Poor: Comparing Money-metric and Subjective Poverty Rates in South Africa

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  • Dorrit Posel
  • Michael Rogan

Abstract

In this study, we compare subjective and money-metric measures of poverty in South Africa using data collected in the 2008/09 Living Conditions Survey (LCS). In addition to collecting detailed information on expenditure, the LCS asked respondents to provide an assessment of the economic status of their household, ranging from “very poor” to “wealthy”. We find considerable overlap between per-capita expenditure measures of poverty status and subjective poverty status among households. However, we also identify a number of significant characteristics that distinguish households where poverty measures do not overlap, including household size, the share of children and the elderly in the household, home ownership and housing type, access to piped water and electricity, and access to farming land. These characteristics suggest both that expenditure measures are not able to capture the multidimensional nature of economic well-being and that the level of expenditure in the household is underestimated. This underestimation may arise partly because poverty measures based on per-capita expenditure do not recognize scale economies in the household, and also because the value of small-scale economic activities can be difficult to measure, as in the case of subsistence farming.

Suggested Citation

  • Dorrit Posel & Michael Rogan, 2016. "Measured as Poor versus Feeling Poor: Comparing Money-metric and Subjective Poverty Rates in South Africa," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 17(1), pages 55-73, February.
    • Handle: RePEc:taf:jhudca:v:17:y:2016:i:1:p:55-73
    DOI: 10.1080/19452829.2014.985198
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    2. Tiaan MEIRING & Catherine KANNEMEYER & Elnari POTGIETER, 2018. "The Gap Between Rich and Poor: South African Society’s Biggest Divide Depends on Where You Think You Fit In," Working Paper ffd19ae8-4b12-4b82-b218-8, Agence française de développement.
    3. Eleftherios Giovanis & Oznur Ozdamar, 2021. "Regional employment support programs and multidimensional poverty of youth in Turkey," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 583-609, December.
    4. Chenhong Peng & Paul S. F. Yip & Yik Wa Law, 2020. "What Factors Beyond Economic Poverty Lead People in High-income Societies to Feel Poor? Evidence from Hong Kong," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 991-1027, December.
    5. Dorrit Posel, 2021. "Intra-Household and Inter-Personal Comparisons of Subjective Well-Being: Dorrit Posel," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(6), pages 2527-2529, December.
    6. Huang, Wei & Li, Fan & Liao, Xiaowei & Hu, Pingping, 2018. "More money, better performance? The effects of student loans and need-based grants in China's higher education," China Economic Review, Elsevier, vol. 51(C), pages 208-227.
    7. Andreas Forø Tollefsen, 2020. "Experienced poverty and local conflict violence," Conflict Management and Peace Science, Peace Science Society (International), vol. 37(3), pages 323-349, May.
    8. Netta Achdut & Tehila Refaeli & Talia Meital Schwartz Tayri, 2021. "Subjective Poverty, Material Deprivation Indices and Psychological Distress Among Young Adults: The Mediating Role of Social Capital and Usage of Online Social Networks," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(3), pages 863-887, December.
    9. Posel, Dorrit & Oyenubi, Adeola, 2023. "Heterogeneous gender gaps in mental wellbeing: Do women with low economic status face the biggest gender gaps?," Social Science & Medicine, Elsevier, vol. 332(C).
    10. Elena Grimaccia & Alessia Naccarato, 2019. "Food Insecurity Individual Experience: A Comparison of Economic and Social Characteristics of the Most Vulnerable Groups in the World," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 391-410, May.
    11. Ana I. Moro Egido & Maria Navarro & Ángeles Sánchez-Domínguez, 2017. "Changes in Subjective Well-Being Over Time in Germnay," ThE Papers 17/05, Department of Economic Theory and Economic History of the University of Granada..
    12. Chang, Qingsong & Peng, Chenhong & Guo, Yingqi & Cai, Ziyi & Yip, Paul S.F., 2020. "Mechanisms connecting objective and subjective poverty to mental health: Serial mediation roles of negative life events and social support," Social Science & Medicine, Elsevier, vol. 265(C).
    13. Chenhong Peng, 2023. "Household Consumption and the Discrepancy Between Economic and Subjective Poverty: The Mediating Roles of Perceived Social Status and Social Connectedness," Journal of Happiness Studies, Springer, vol. 24(5), pages 1703-1727, June.
    14. Siu Ming Chan & Hung Wong, 2022. "Housing and Subjective Well-Being in Hong Kong: A Structural Equation Model," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(3), pages 1745-1766, June.
    15. Owasim Akram & Mathilde Maitrot & Thomas Denk, 2020. "Generational Bargain, Transfer of Disadvantages and Extreme Poverty: A Qualitative Enquiry from Bangladesh," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 1173-1194, September.
    16. Garman, E.C. & Avendano, Mauricio & Araya, Ricardo & Evans-Lacko, Sara & McDaid, David & Zimmerman, A. & Lund, C., 2022. "Understanding the complex relationship between multidimensional poverty and depressive symptoms among young South Africans: a cross-sectional study," LSE Research Online Documents on Economics 116674, London School of Economics and Political Science, LSE Library.
    17. Siu Ming Chan & Hung Wong, 2020. "Impact of Income, Deprivation and Social Exclusion on Subjective Poverty: A Structural Equation Model of Multidimensional Poverty in Hong Kong," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 971-990, December.
    18. Chenhong Peng & Yik-Wa Law, 2023. "How Do Consumption Patterns Influence the Discrepancy Between Economic and Subjective Poverty?," Journal of Happiness Studies, Springer, vol. 24(4), pages 1579-1604, April.
    19. Yanghan Li & Tianyi Chen & Quan Li & Linxiu Jiang, 2023. "The Impact of Subjective Poverty on the Mental Health of the Elderly in China: The Mediating Role of Social Capital," IJERPH, MDPI, vol. 20(17), pages 1-18, August.

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