Household Expenditure Patterns in South Africa - 1995

Analyses of data on household expenditure patterns can tell a great deal about characteristics of households or groups of households. In this paper the impact of income levels in determining household expenditure patterns is analysed. The analysis is then extended to see whether households from different racial groups differ in terms of expenditure patterns. In addition to this the paper investigates whether the location of households (rural/urban or region within South Africa) affects household expenditure patterns. A similar analysis is done for female- versus male-headed households. The analysis is performed assuming that, in general, household expenditure patterns are influenced largely by household composition, the household's needs, preferences, and financial means. It is found that the level of household income is often a major determinant of expenditure patterns of households, and hence differences between patterns of expenditure are largely a reflection of differences in income between household groups or individual households. However, income is not the only determinant and various factors, most importantly race and location, also affect preferences and hence expenditure patterns.