Determinants of Subjective Poverty in Rural and Urban Areas of South Africa

Santos Bila and Mduduzi Biyase
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Santos Bila: College of Business and Economics, University of Johannesburg

Economics Working Papers from College of Business and Economics, University of Johannesburg, South Africa

Abstract: This paper extends the investigation from objective to subjective poverty, an issue that has received inadequate attention in South Africa. The empirical analysis based on the fixed effects two-stage least squares (FE-2SLS) and Living Condition Survey (LSC) reveal that household size, being male, being married or divorced, holding primary and tertiary education are strong predictors of subjective poverty across sub-samples. However, the determinants of rural subjective poverty are slightly different to the determinants of urban subjective poverty. For example, owning a piece of land appear to be important in explaining poverty in the rural sample, contrary to the urban sample. Moreover, we find that health and unemployment are strong predictors of urban sample, while they are not significant for the rural sample. The results have important implications for policy intervention. It suggests that land is still an important component of diverse livelihoods for rural people and can assist rural emerging farmers to be involved in large-scale farming.

Keywords: Determinants; location; fixed effect instrumental variable; Subjective poverty (search for similar items in EconPapers)
JEL-codes: D63 I32 I38 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2022, Revised 2022
New Economics Papers: this item is included in nep-dev
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