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Exploring psychological well-being and poverty dynamics in South-Africa: evidence from NIDS waves 1-5
No full textThe mechanisms that perpetuate poverty are still not well understood. An emerging literature focuses on the psychology of poverty, investigating psychological and behavioral factors that may affect poverty entry and make it difficult to escape poverty. This paper explores the relationship between psychological well-being and poverty in South Africa. We rely on Waves 1-5 of the National Income Dynamics Study (NIDS), a nationally representative household panel survey that spans a decade. A descriptive analysis shows a strong negative correlation between psychological well-being and per capita household expenditure, with individuals in lower expenditure deciles displaying significantly higher risks of depression and lower levels of life satisfaction. To identify causal effects, we turn to an econometric framework that accounts for endogenous initial poverty conditions, unobserved heterogeneity and non-random panel attrition. Preliminary results suggest that the risk of poverty significantly increases as psychological well-being deteriorates, and the other way around. We discuss a range of avenues for follow-up research.Funding for this research from the Department of Planning, Monitoring and Evaluation is gratefully
acknowledged.
We are grateful to Simone Schotte for her willingness to share do-files. Murray Leibbrandt would
like to thank the NRF/DSD National Research Chair’s Initiative for funding his research and for
partial funding of the work on this paper by Nik Stoop and Rocco Zizzamia
HIV Risk Among Adolescent Girls and Young Women in Age-Disparate Partnerships: Evidence From KwaZulu-Natal, South Africa
No full textBackground: Evidence on the role of age-disparate partnerships in high HIV-infection rates among young women in sub-Saharan Africa remains inconclusive. This study examined the HIV-infection risk associated with age-disparate partnerships among 15- to 24-year-old women in a hyperendemic setting in South Africa.
Methods: Face-to-face questionnaire, and laboratory HIV and viral load data were collected during 2014–2015 among a representative sample (15–49 years old) in KwaZulu-Natal. The association between age-disparate partnerships (age difference ≥5 years) and HIV status among 15- to 24-year-old women (N = 1459) was assessed using multiple logistic regression analyses. Data from the male sample on all on-going partnerships (N = 1229) involving 15- to 24-year-old women were used to assess whether young women's age-disparate male partners were more likely to have a viral load ≥1000 copies per milliliter, a marker of HIV-infection risk.
Results: Women reporting an age disparity in any of their 3 most recent partnerships were more likely to test HIV positive compared to women with only age-similar partners [adjusted odds ratio (aOR): 1.58, 95% confidence interval (CI): 1.20 to 2.09, P < 0.01]. Among partnerships men reported with 15- to 24-year-old women, the age-disparate male partners were more likely to be HIV positive and have a viral load ≥1000 copies per milliliter (aOR: 2.05, 95% CI: 1.30 to 3.24, P < 0.01) compared with age-similar partners. Results were similar for each category of age disparity: partners 5–9 years older (aOR: 2.01, 95% CI: 1.18 to 3.43, P = 0.010) and those ≥10 years older (aOR: 2.17, 95% CI: 1.01–4.66, P = 0.048).
Conclusions: Results indicate that age-disparate partnerships increase young women's HIV risk, although conclusive evidence was not ascertained. Interventions addressing risk from age-disparate sexual partnering, including expanding antiretroviral treatment among older partners, may help to reduce HIV incidence among young women.Presented in part at the 9th IAS Conference on HIV Science; July 25, 2017, Paris, France, TUAC02.
The HIV Incidence Provincial Surveillance System (HIPSS) is funded by a cooperative agreement (3U2GGH000372) between Epicenter and the Centers for Disease Control and Prevention (CDC). Support was provided to BMB by the National Research Foundation, South Africa, through the Research Career Advancement Fellowship. ABMK is supported by a joint South Africa–U.S. Program for Collaborative Biomedical Research, National Institutes of Health grant (R01HD083343). The content, findings, and conclusions in this paper are those of the author(s) and do not necessarily represent the official views of the Centers for Disease Control and Prevention, or any other funder
Measuring and profiling financial literacy in South Africa
No full textBackground: Microeconomic theories of financial behaviour tend to assume that consumers possess financial skills necessary to undertake related financial decisions.
Aim and setting: We investigated this assumption by exploring the distribution of financial literacy among South Africans.
Method: In the absence of a standard measure, a financial literacy index was constructed for the country using data collected on attitudes (towards), access to and use of financial services over the period 2005–2009. In a multivariate regression analysis, we used the index to examine the extent to which differences in financial literacy correlate with demographic and economic characteristics.
Results: The index revealed substantial variation in financial literacy by age, education, province and race. Overall, demographic characteristics contributed up to 10% of the financial literacy differences among individuals in South Africa.
Conclusion: These results can be used to guide policy makers where to place more emphasis in terms of financial education for South Africans
Spatial poverty and inequality in South Africa: A municipality level analysis
No full textUsing the 2011 South African population census, we provide income and multidimensional poverty and inequality estimates at the municipal level. We go on to estimate a spatial econometric model to identify the correlates of poverty across municipalities in South Africa. Our results show that both income and multidimensional poverty and inequality vary significantly across municipalities in South Africa. In general, areas that are historically characterized by low economic and welfare outcomes still experience significantly higher poverty and deprivation levels. Using both global and local spatial autocorrelation measures we find significant and positive spatial dependence and clustering of regional development indicators. The situation of poverty is both spatially unequal and autocorrelated.
Results from our spatial econometric analysis indicate negative and significant relations between the municipal poverty levels and local levels of education and economic activity (GDP per capita). Significant and positive relations are found between municipal poverty levels and local inequality levels, suggesting that municipalities with higher levels of inequality also have higher incidences of poverty. In contrast, natural geographic factors such as rainfall and temperature are not significantly related to municipal poverty. Accounting for both direct, intra-municipality effects as well as spillover effects of neighbouring municipalities is important. These spillover effects notably reduce the coefficient sizes suggested by non-spatial, OLS regressions. Most striking, the large negative coefficient that OLS attributes to residing within a historical homeland area is greatly reduced and even loses statistical significance in some spatial models. Clearly municipalities in homeland areas are particularly likely to be surrounded by very poor municipal neighbours and therefore subject to strong negative spillovers. That said, when interactions between this historical geographical variable and contemporary socio-economic deprivations are included, then homeland becomes statistically significant once more. This makes the important point that while, it is these socio-economic deprivations that are particularly important in explaining contemporary income poverty across the county, those who reside in these homeland areas remain especially badly off in terms of these deprivations.This paper is written as part of the “Social Cohesion, Inequality and Inclusive Development”
partnership agreement between the French Development Agency, South African Office and the
University of Cape Town. It is funded by the French Development Agency (AFD). We acknowledge
very useful comments from AFD seminars in Pretoria and in Paris as well as from participants in
the 4th DIAL Conference on Development Economics
The parent trap: Cash transfers and the intergenerational transmission of depression in South Africa
No full textPlease Note: This paper has been updated. Mental illness and substance abuse make up the leading cause of disability among adolescents around the world, and yet adolescent mental health is an understudied area in developing countries. This is partly due to a lack of high quality nationally representative data on the prevalence of mental illness, in particular, in low-income countries. The impact of mental illness in adolescence is particularly problematic, given the formative nature of this period. This paper provides the first nationally representative estimates of the intergenerational transmission of depression in South Africa, and in Sub-Saharan Africa. Using a longitudinal household survey, we find that one-third of South African children will suffer from depression if either parent suffers from depression - and that parental mental health is the single largest determinant of child mental health. The nature of the intergenerational transmission of transmission, and its key determinants, have not been studied in-depth. While studies exist, which examine the impact of cash transfers on depression, research on the impact of cash transfers on the intergenerational transmission of depression is limited. We use exogenous variation in the roll-out pattern of an unconditional cash transfer in South Africa and find that cash transfer receipt can have a large impact on the intergenerational transmission of depression. Our estimates show that the South African child support grant reduces the intergenerational transmission of depression to teenage children by more than forty percent
Macroeconomic Effects of Commodity Price Shocks in a Low‐income Economy: The Case of Tobacco in Malawi
No full textA major concern for developing economies is a dependence on commodities when their prices are volatile as a major change in the international commodity price can have important implications for economic growth. While some cross‐country studies exist, there is lack of country specific studies that take into account the different characteristics of low‐income economies. This paper contributes to the growing literature by considering the case of Malawi and the macroeconomic impact of price shocks in its major export crop of tobacco. Using a structural vector autoregression (SVAR) approach on quarterly Malawian data from 1980:1 to 2012:4, the paper establishes that a positive tobacco price shock has a significant positive impact on the country's gross domestic product, decreasing consumer prices and inducing real exchange rate appreciation. The results are robust to alternative specifications of a SVAR on difference stationary data and cointegrating VAR. The cointegrating VAR confirms the existence of a long run‐relationship among the variables and causality that runs from tobacco prices
Perceptions of inevitability and demand for redistribution: Evidence from a survey experiment
No full textBelieving that inequality is inevitable may limit demand for redistribution. We explore this idea with a survey experiment in South Africa, one of the most unequal countries in the world. Inevitability beliefs can be influenced by learning about lower inequality elsewhere. We find that the demand for redistributive policies reacts to this information, while it is insensitive to other types of information/messages. Our analysis suggests a promising, and heretofore unexplored, avenue of research for refining our understanding of the determinants of demand for redistribution
A poverty dynamics approach to social stratification: The South African case
No full textThe wave of upbeat stories on the developing world’s emerging middle class has reinvigorated a debate on how social class in general and the middle class in particular ought to be defined and measured. In the economics literature, most scholars agree that being middle class entails being free from poverty, which means being able to afford the basic things in life – not only today, but also tomorrow. In consequence, there is an increasing tendency to define the middle class based on a lack of vulnerability to poverty. In this paper, we strengthen and expand on these existing approaches in three ways: First, we incorporate the differentiation between the middle class and a (non-poor) vulnerable group into a broader social-stratification schema that additionally differentiates between transient and chronic poverty. Second, in estimating the risk of poverty, we employ a multivariate regression model that explicitly allows for possible feedback effects from past poverty experiences and accounts for the potential endogeneity of initial conditions, unobserved heterogeneity, and non-random panel attrition – four factors insufficiently addressed in existing studies. Third, we highlight the value of paying attention to these conceptual and modelling issues by showing that class divisions based on monetary thresholds inadequately capture a household’s chances of upward and downward mobility. We then apply our conceptual framework to the South African case. We find that only one in four South Africans can be considered stably middle class or elite. Access to stable labor market income is a key determinant of achieving economic stability. A lack of jobs as well as the prevalence of precarious forms of work drive high levels of vulnerability, which in turn constrains the development of an emergent middle class – not only in South Africa but potentially also in other parts of the developing world that face similar labor market challenges.This paper has been produced with financial assistance from the Programme to Support Pro-Poor Policy Development (PSPPD), located within the Department of Planning, Monitoring and Evaluation (DPME), and from the World Bank Group, Poverty Global Practice Unit, Africa Region. Simone Schotte acknowledges support from the German Institute of Global and Area Studies and the Evangelisches Studienwerk Villigst. Murray Leibbrandt acknowledges the Research Chairs Initiative of the Department of Science and Technology and National Research Foundation for funding his work as the Chair in Poverty and Inequality Research.
The authors are grateful to Francois Bourguignon, Denis Cogneau, Arden Finn, Lena Giesbert, Kanishka Kacker, Stephan Klasen, Jann Lay, Nga Thi Viet Nguyen, Victor Sulla, Martin Wittenberg, Ingrid Woolard, Precious Zikhali and three anonymous reviewers for helpful suggestions
Overconfident people are more exposed to “black swan” events: a case study of avalanche risk
No full textOverconfidence is a well-established bias in which someone’s subjective confidence in their own judgment is systematically greater than their objective accuracy. There is abundant anecdotal evidence that overconfident people increase their exposure to risk. In this paper, we test whether overconfident backcountry skiers underestimate the probability of incurring a snow avalanche accident. An avalanche accident is a typical “black swan” event as defined by Taleb (The black swan: the impact of the highly improbable, Random House, New York, 2007) because it has a very low probability of occurring but with potentially dramatic consequences. To consider black swan events when studying overconfidence is particularly important, in light of previous findings on the role of overconfidence when feedbacks on tasks previously performed are inconclusive and infrequent. We run our test by measuring individual overconfidence using standard tools from the literature and then use a random effect logit model to measure its effect on the probability to take the ski route. We show that (1) overconfidence is widespread in our sample; (2) practitioners who are more prone to overestimate their knowledge are also more likely to take risks associated with a ski trip under the threat of avalanche danger, a result robust to a set of specification tests we perform. This suggests that overconfident people are more exposed to black swan events, by taking a risky decision that can bring about fatal consequences
The gap between rich and poor: South African society’s biggest divide depends on where you think you fit in
No full textIn this paper we consider social cohesion primarily in terms of its absence – “the nature and extent of social and economic divisions within society” (Easterly et al., 2006: 105). We use data from the Institute for Justice and Reconciliation’s South African Reconciliation Barometer (SARB) to advance an understanding of what underpins individual perceptions of inequality as the biggest division in South Africa. In particular, our interest is in the relationship between perceived relative standing and registering the gap between rich and poor as the greatest divide in South Africa.This paper is an AFD-UCT-IJR Partnership, written as part of the “Social Cohesion, Inequality and
Inclusive Development” partnership agreement between the French Development Agency, South
African Office and the University of Cape Town. It is funded by the French Development Agency
(AFD). We acknowledge very useful comments from AFD seminars in Pretoria and in Paris as well
as from participants in the 4th DIAL Conference on Development Economics