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THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Assets and capabilities poverty in South Africa Sandile Simelane Statistics South Africa 1 Slide 2 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Outline Background Research questions Data & methods Results Discussion, conclusions & policy implications 2 Slide 3 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Background This paper uses a composite index of household assets and capabilities data to examine levels and trends of poverty for provinces, district councils (DCs) and local municipalities of South Africa. The resulting index: the assets and capabilities poverty (ACP) Calculated at household level demonstrates that poverty can be measured in the absence of income or expenditure data. The index of ACP is a complement not replacement of income & expenditure measures of poverty 3 Slide 4 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Background contd. Motivations for the approach 1.The paper conceptualizes poverty as a multidimensional phenomenon that can be proxied by the socioeconomic variables that are commonly collected in pop. censuses and household surveys. 2.South Africas current socio-economic policy (RDP) states that meeting basic needs for all in the countrys population is the top priority for government. 3.Income data are poorly measured in LDCs (Bollen, Glanville and Stecklov 2001; World Bank 1995), including South Africa (Statistics South Africa 2000). 4.The index used has been found to be a good measure of wealth in other developing countries (Filmer and Pritchett 2001). 4 Slide 5 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Research questions Who are assets and capabilities poor in South Africa and what has been the trend in poverty levels between 1996 and 2007? How are the are the assets and capabilities poor (hholds/ individuals) distributed, spatially, in the country? What are the defining characteristics of the poor? 5 Slide 6 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Data & methods Data Pooled dataset comprising the 2007 CS and the 1996 & 2001 censuses of South Africa Revisions to this work will include census 2011 Q. Why pooled data? A. To control for the cross-dataset differences in the distribution of the variables used & derive estimate that are comparable across the datasets. CS 2007 Large sample survey Representative at municipality level 6 Slide 7 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 Data & methods contd Methods Identification of Assets & Capabilities poor households Step 1: Computation of the index Index of ACP computed using Principal Components Analysis (PCA) by combining information on 8 categories of household assets/characteristics and 2 measures of household functional capabilities. 7 Slide 8 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 8 Data & methods contd About PCA PCA is a statistical procedure that reduces the dimensionality of multiple variables by transforming them into few linear components that are uncorrelated. For each component, PCA assigns to each observation (household) a scoring factor based on the households possession (or lack) of the variables included in the computation, after taking into account the covariation of these variables in the population being studied. These scores can be used to sort the observations (households) from the poorest to the wealthiest. The 1 st component accounts for the largest proportion of the total variation in the set of variables used. For this reason, the 1 st component is used as the index of ACP. Slide 9 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 9 Data & methods contd Hhold asset/characteristics 1. Telephone/ cell phone [yes/no] 2. Type of dwelling structure [modern; traditional/informal; other/caravan/tent] 3. Type of toilet [flush/chemical; pit latrine/bucket; no toilet/other e.g. open land] 4. Source of water [piped water inside; piped water outside; public tap; other source] 5. Refuse removal [local auth/private co.; communal/own dump; no disposal facility] 6. Energy for cooking [ electricity/gas, paraffin, wood/coal/animal dung/other ] 7. Energy for lighting [ electricity/gas, paraffin, wood/coal/animal dung/other ] 8. Energy for heating [ electricity/gas, paraffin, candles/other ] Capabilities 1. Adult employment ratio 2. Proportion of adults with high school education & above Variables used in PCA 23 binary variables & 2 continuous variables Slide 10 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 10 Data & methods contd Assessment of the index The scoring factors are all in the expected direction. All the variables associated with higher SESe.g. having piped water inside the dwellinghave bigger (and +ve) scoring factors than those that are perceived to measure lower levels of SES Slide 11 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 11 Data & methods contd Identification of Assets & Capabilities poor households Step 2: Calculation of the poverty line Poverty line = median value of index of ACP. based on theory of Justice as Fairness (Rawls 1971) Thus estimate of poverty level in a give geographic unit = Slide 12 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 12 Data & methods contd Analysis of characteristics of poor households Logistic regression model is employed pTi = probability that household (i) is classified as poor in year T Explanatory variables include: sex of the head of household; rural/ urban residence; province; age of household head; tenure status of dwelling unit; type of residence; crowding; etc. NB: No causality implied Slide 13 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 13 Data & methods contd Statistical analysis of spatial distribution of poor households Morans I = global test for clustering/ autocorrelation Operates like correlation coefficient Slide 14 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 14 Data & methods contd Statistical analysis of spatial distribution of poor households Local indicator of spatial association (LISA) statistics Interpretation of LISA positive Ii means either a high value is surrounded by high values (high-high) or a low value is surrounded by low values (low-low). A negative score of Ii means either a high value is surrounded by low values (high-low) or vice versa (low-high). Slide 15 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 15 Results : levels & trend Cumulative Distribution Functions (CDFs) of index of ACP, 1996-2007 Huge but declining, levels of inequality in living stds during the period 1996-2007 Decline in national level of ACP driven by improvements among the poor Slide 16 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 16 Results : levels & trend Levels and trend in household assets and capabilities poverty by province, 1996-2007 Province Census 1996 Census 2001 CS 2007 Western Cape16.615.86.3 Gauteng23.82314.5 Northern Cape41.033.527.5 Free State55.149.227.2 KwaZulu-Natal55.452.548.2 North West65.45444.6 Mpumalanga65.159.360.1 Eastern Cape7366.658.3 Limpopo82.775.879.5 South Africa49.145.138.2 3 rd 3 rd 3 rd Slide 17 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 17 Results contd spatial distribution of ACP Map showing the proportion (%) of assets & capabilities poor households by local Municipality, South Africa 1996. Slide 18 THE SOUTH AFRICA I KNOW, THE HOME I UNDERSTAND STATS SA Census Education level of the labour force, 2011 18 Results contd spatial distribution of ACP Lisa Cluster map for ACP, 1996 Morans I = 0.4088, p