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The study focuses on the analysis and application of the methodologies used by Statistics South Africa (Stats SA) and Slabbert for measuring poverty.
When measuring poverty, Stats SA determines a proxy income for households and compares it with a standard poverty line which causes this methodology to be inaccurate.
The methodology used by Stats SA to determine the headcount index does not lend itself to determine the poverty gap, as proxy income values are used instead of real income values.
This measure therefore does not show how far the poor are below the poverty line.
Slabbert measures poverty by comparing the total income of households’ with their respective poverty lines.
The methodology used by Slabbert proves to be more accurate and can in addition determine the depth of poverty (the poverty gap).
Applying the two methodologies on the same set of data from Sharpeville, this study shows that when the Stats SA methodology is employed the poverty rate is lower than the one determined by Slabbert.
A lower poverty rate can mislead policy makers as it does not reflect the true state of affairs of the inhabitants of the area with regard to poverty.
Mmapula Brendah Sekatane holds a PhD in Economics from North-West University.
She is currently employed as a Senior lecturer and subject head at the department of Economics at North-West University Vaal Campus.
Sekatane specialise in international trade and development economics (socio-economic, unemployment and poverty studies)
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