MEASURING POVERTY AND DEPRIVATION IN SOUTH AFRICA

Abstract

This paper compares a standard expenditure‐based poverty measure with a specifically created composite measure of deprivation using household survey data from South Africa. While there is a strong overall correlation between expenditures and levels of deprivation, the correlation is much weaker among the worst‐off South Africans. In addition, the two measures differ considerably in the impact of race, headship, location (urban, rural), and household size on expenditure poverty versus deprivation. In general, the deprivation measure finds more Africans, rural dwellers, members of de facto female‐headed households, and members of smaller households deprived than expenditure poor. Only the differences in the effect of household size on poverty are sensitive to assumptions about equivalence scales. As a result, the two measures diverge greatly in identifying the poorest and most deprived sections of the population, which may have considerable consequences for targeting.