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The Aid and Maid System: South African Data Pitfalls

Author

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  • Steven F. Koch

    (Department of Economics, University of Pretoria)

Abstract

This paper presents research on South African household expenditure share behaviour. The research examines whether or not a theoretical and empirical model, which has been successful in explaining expenditure shares in Australia, is valid when applied to South African data. The primary conclusion of the research is that expenditure shares in South Africa do not conform to the assumptions set out in the model. Although there are many potential reasons for non-conformity, this paper provides evidence that the estimates produced within the AID System and the MAID System suffer from heteroskedasticity and non-normality. Therefore, in order to improve the understanding of spending behaviour by South African households, models will have to be specifically developed to deal with the idiosyncrasies of South African data.

Suggested Citation

  • Steven F. Koch, 2005. "The Aid and Maid System: South African Data Pitfalls," Working Papers 200511, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:200511
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    Cited by:

    1. Sihaam Nieftagodien & Servaas van der Berg, 2007. "Consumption patterns and the black middle class: The role of assets," Working Papers 02/2007, Stellenbosch University, Department of Economics.

    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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