Poverty reasons and effects

Topics: Poverty, Poverty threshold, Poverty in the United States Pages: 8 (1626 words) Published: May 12, 2013
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1.How is poverty measured

2.What is the reasons for poverty

3.What are the effects of poverty

4.Which measurements are implemented by the south African government



Bernadino heights high school

Economics research task:

Poverty in South Africa

Jamie lee dondas

Grade 11F
In this task I will be discussing poverty in South Africa. Poverty means suffering to the poor and not being able to satisfy their basic needs of food, water, clothing and shelter and also not having access to clean water, sanitation healthcare services, education and other social services. Body

1. How is poverty measured?
Poverty measurements are used to compare poverty across countries over time. The World Bank poverty line: Economists have set a poverty line based on the cost of a common basket of basic food products. The poverty line is used as a measure to identify households/individuals in need of social grants and free basic services. The World Bank’s poverty line as applied internationally is calculated between $1 and $2 per day per person .In its latest update, the Bank has used national poverty lines for 75 developing countries .There has been a huge improvement in the price levels of data, thanks to the ICP, which collects the data on prices needed to estimate purchasing power parity exchange rates. According to the latest ICP for 2005, the Bank’s main international poverty line was $1.08 a day at 1993 PPP. The new ICP price data for 2005 indicate that the cost-of-living is higher in developing countries than was expected. The poverty gap: The difference between household income and the poverty line is the amount of money of which the income of a household is below the poverty line. The poverty gap provides a clearer perspective on the depth of poverty. Economic inequality: Economic inequality is the difference between income and expenditure of the poorest and the richest components of a country or area. The issue of economic inequality involves equity, equality of outcome and opportunity, and life expectancy .Economic inequality varies between societies, historical periods, economic structures and systems (capitalism or socialism), ongoing and past wars. Refer to figure E The poverty rate: The percentage of the total population in an area or country living in poverty is the poverty rate. Poverty rate by province

➢ The poverty rate in the nine provinces of South Africa differ ,as well as in rural and urban settlements. According to the Bureau for market research , poverty rates in 2005/2006 increased from 24,9% in Gauteng to 64,6% in Limpopo. Refer to figure G Poverty by gender

➢ There is a major difference in the poverty rate according to gender:45% of all female households in South Africa live below the lowest bound of the poverty line, compared to only 25% of male households. Poverty by level of qualifications

➢ Poverty incidence are also high among those with lower education levels. Poverty rate by age
➢ The incidence of poverty generally increased with the age of the age of the head of the household. The reason being for this is partly because of families relying in pension grants. The statistics south Africa poverty line: South Africa has set a criteria to work out a MLS as follows: ➢ Statistics SA proposed a poverty line of R322 per month in 2000 prices. In 2006 about 47% of the population did not have R322 for essential food and other items. ➢ In 2008 ,the MLS of an average household was set as R1957,76 per month. The amount has increased over time to take inflation into account. Refer to figure A.

2.What are the reasons for poverty ?
Poverty is caused by many different factors , some are very basic and some more specific to a certain country. The following are the most common reasons for poverty: Overpopulation: Overpopulation is the situation of...
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