WP08/2007

Post-transition poverty trends based on an alternative data source

Stellenbosch Working Paper Series No. WP08/2007

Author(s): Servaas van der Berg, Megan Louw, Derek Yu

JEL Classification: D6, I32, I38

Keywords: Poverty, Inequality, Income distribution Analysis, South Africa

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Abstract:

This paper analyses a previously unused source of data – the All Media and Product Survey (AMPS) – to arrive at alternative estimates of the post-transition poverty path. The motivations for using this non-official data source are twofold: concern over the comparability of the existing official post-transition datasets – the Income and Expenditure Survey (IES) and Population Census – and a desire to extend analysis of poverty trends beyond 2001. While official data sources are generally preferred for purposes of poverty analysis, the IES and Census collect data at long (five or ten year) intervals, and additional years pass before these datasets become available to the public. The expenditure data contained in the General Household Survey is available annually, although data are captured in a small number of categories that are not very conducive to analysis at the lower end of the income distribution. Analysis on AMPS data confirms the large decline in poverty implied by an increase of R18 billion (in 2000 Rand) in social grant payments between 2000 and 2004. The direction of this trend is consistent with recent research findings based on more frequently analysed data sources, including the work done by Agüero, Carter and May (2005), Seekings (2006), and Meth (2006).