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Determinants of Subjective Poverty in Rural and Urban Areas of South Africa

Author

Listed:
  • Santos Bila

    (College of Business and Economics, University of Johannesburg)

  • Mduduzi Biyase

    (College of Business and Economics, University of Johannesburg)

Abstract

This paper extends the investigation from objective to subjective poverty, an issue that has received inadequate attention in South Africa. The empirical analysis based on the fixed effects two-stage least squares (FE-2SLS) and Living Condition Survey (LSC) reveal that household size, being male, being married or divorced, holding primary and tertiary education are strong predictors of subjective poverty across sub-samples. However, the determinants of rural subjective poverty are slightly different to the determinants of urban subjective poverty. For example, owning a piece of land appear to be important in explaining poverty in the rural sample, contrary to the urban sample. Moreover, we find that health and unemployment are strong predictors of urban sample, while they are not significant for the rural sample. The results have important implications for policy intervention. It suggests that land is still an important component of diverse livelihoods for rural people and can assist rural emerging farmers to be involved in large-scale farming.

Suggested Citation

  • Santos Bila & Mduduzi Biyase, 2022. "Determinants of Subjective Poverty in Rural and Urban Areas of South Africa," Economics Working Papers edwrg-02-2022, College of Business and Economics, University of Johannesburg, South Africa, revised 2022.
    • Handle: RePEc:ady:wpaper:edwrg-02-2022
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    References listed on IDEAS

    as
    1. Mduduzi Biyase & Talent Zwane, 2018. "An Empirical Analysis Of The Determinants Of Poverty And Household Welfare In South Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 52(1), pages 115-130, January-M.
    2. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-484, July.
    3. Aliber, Michael, 2003. "Chronic Poverty in South Africa: Incidence, Causes and Policies," World Development, Elsevier, vol. 31(3), pages 473-490, March.
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    5. Vusi Gumede, 2021. "Revisiting Poverty, Human Development and Inequality in Democratic South Africa," Indian Journal of Human Development, , vol. 15(2), pages 183-199, August.
    6. Fintel, Dieter von & Fourie, Johan, 2019. "The great divergence in South Africa: Population and wealth dynamics over two centuries," Journal of Comparative Economics, Elsevier, vol. 47(4), pages 759-773.
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    More about this item

    Keywords

    Determinants; location; fixed effect instrumental variable; Subjective poverty;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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