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THE PRESIDENCY: REPUBLIC OF SOUTH AFRICA
Private Bag X1000, Pretoria, 0001
NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NO. 3192
DATE PUBLISHED: 16 November 2012
3192. Mr L S Ngonyama (Cope) to ask the President of the Republic:
(1) Whether the Government intends to measure the (a) size and
direction of income inequality and (b) level of poverty relative
to wealth and prosperity by means of the Gini coefficient; if
not, what is the position in this regard; if so, (i) on what
grounds did he make the statement in his address to the National
House of Traditional Leaders at Parliament rejecting the fact
that the inequality was widening and (ii) what alternative
scientific measures is the Government using to graph income
inequality;
(2) whether he will make a statement on the matter?
NW3966E
REPLY:
Stats SA has been conducting surveys regarding the income of South
Africans since 1995. However, the methodology has improved and the
sample used has widened since the surveys first began. For example,
the Income and Expenditure Survey which has been conducted every 5
years since 1995 initially used the recall methodology where the
subjects were asked to remember facts. Since 2005/06, the diary
method has also been used which is in line with international best
practice. Given the change, there are some comparability issues with
the previous methodology. In order to better measure poverty, the
Living Conditions Survey was introduced into the survey programme in
2008/09.
To date only one such survey has been conducted and the next one is
scheduled to go into the field in September 2013.
From these surveys, the following measures can be calculated:
⢠Gini coefficient: a measure of inequality within a group of people;
⢠Poverty headcount: the incidence of poverty within a group of people
calculated as the proportion of people living below a particular
threshold;
⢠Poverty gap: the average distance of those below a particular poverty
line from that poverty line; and
⢠Severity of poverty: a measure of how the poorest of the poor are
faring in society.
In terms of the Gini coefficient, a score of 1 indicates a completely
unequal society while a score of 0 indicates a completely equal
society. Based on the results of the latest two IES published by Stats
SA and most specifically on expenditure per capita excluding taxes,
Gini coefficient has decreased as shown in the table below:
|Source |Year |Gini coefficient |
|IES 2005/2006 |2006 |0, 67 |
|IES 2010/2011 |2011 |0, 65 |
This movement in the Gini coefficient reflects a decrease in the levels
of inequality in South African society between 2006 and 2011.
It was on this basis that I rejected assertions that inequality was
widening.
Apart from the surveys referred to above, Stats SA uses income per capita
quintiles and income per capita deciles to graph inequality. These
measures can also be derived using expenditure data from the two surveys
mentioned above.