Abstract
If the aim of studying poverty is not only improving the well-being of households who are currently poor, but also preventing people from becoming poor in the future, a new forward looking perspective must be adopted. This study analyses determinants of household poverty dynamics in rural areas of the Eastern Cape Province, South Africa using a panel dataset on a representative sample of 300 rural households in the Amathole District Municipality. The result of the study shows a significant flow in and out of poverty, which is a sign of vulnerability. While 63% of the sampled households are poor (ex post), while 48% are vulnerable to becoming poor (ex ante) in future. The result of the probit model indicates that age, level of education and household heads’ occupation, dependency ratio, remittance/diversified income base, exposure to idiosyncratic risks and access to credit are statistically significant in explaining households’ vulnerability to poverty. Implications for policy are discussed.Keywords: Vulnerability, Poverty dynamics, Rural, Household, Expenditure.
Highlights
Despite South Africa’s upper-middle-income country status (GDP per capita is approximately $10, 700) (CIA, 2008), South Africa fares extremely poorly on international comparisons of poverty and other social indicators
Rural households in South Africa as in many developing countries are frequently confronted by severe idiosyncratic risks and covariate risks, resulting in high income volatility, the high incidence of HIV/AIDs, which has caused considerable losses of human lives and disruption of livelihoods
The “lower bound” of the absolute poverty line proposed by Statistics South Africa, which provides for essential food and non-food consumption amount to R322 per capital per month in 2000 prices, was used for this study
Summary
Despite South Africa’s upper-middle-income country status (GDP per capita is approximately $10, 700) (CIA, 2008), South Africa fares extremely poorly on international comparisons of poverty and other social indicators. Rural households in South Africa as in many developing countries are frequently confronted by severe idiosyncratic risks (i.e. household-level shocks, such as human illness, death, injury, unemployment, job loss, asset loss, crop pest and diseases) and covariate risks (i.e. community shocks such as natural disaster or epidemics), resulting in high income volatility, the high incidence of HIV/AIDs, which has caused considerable losses of human lives and disruption of livelihoods. These events have shaped the fortunes of households and affected their mobility across the survival threshold.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
