Estimating a Poverty Line: An Application to Free Basic Municipal Services in South Africa

19 Pages Posted: 3 Dec 2012

See all articles by H. Bhorat

H. Bhorat

University of Cape Town (UCT) - Development Policy Research Unit

Morne Oosthuizen

University of Cape Town

Carlene van der Westhuizen

University of Cape Town

Date Written: October 1, 2011

Abstract

One of the key interventions aimed at improving the welfare of South African households has been local government’s provision of a package of free basic services (FBS) to poor households. It is, however, not completely clear how different municipalities identify households which are eligible for FBS. Evidence suggests that many municipalities currently provide services to all households with a monthly income of less than R1500 per month. This “FBS poverty line” is, however, low in comparison with a number of unofficial poverty lines utilised by policymakers and researchers in South Africa. This paper considers the impact of increasing the value of the FBS line, both in terms of the additional share and number of households eligible for support as well as the additional financial cost. We find that urban municipalities will face the steepest increases in their FBS budgets with any potential increase in the FBS poverty line.

Keywords: free basic services, households, poverty line

Suggested Citation

Bhorat, Haroon I. and Oosthuizen, Morne and van der Westhuizen, Carlene, Estimating a Poverty Line: An Application to Free Basic Municipal Services in South Africa (October 1, 2011). Available at SSRN: https://ssrn.com/abstract=2184241 or http://dx.doi.org/10.2139/ssrn.2184241

Haroon I. Bhorat (Contact Author)

University of Cape Town (UCT) - Development Policy Research Unit ( email )

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Morne Oosthuizen

University of Cape Town ( email )

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Carlene Van der Westhuizen

University of Cape Town ( email )

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South Africa

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