Analysing the causes and symptoms of poverty in a land reform community in the midlands of KwaZulu-Natal.

Abstract

The objectives of this thesis were firstly, to review existing literature in order to identify broadly accepted and measurable indicators of the possible causes of poverty and the resulting symptoms. Secondly, to gather baseline information from a group of land reform beneficiaries in order to identify the different dimensions of poverty affecting the current and future well-being of these households. Thirdly, to undertake empirical analysis to assign these households to a small number of groups exhibiting different symptoms of poverty and then explain these differences in terms of their possible causes. A census survey of 38 land reform beneficiary households - members of a Communal Property Association (CPA) established to purchase Clipstone, a 630 hectare subdivision of the farm Sherwood in the midlands of KwaZulu-Natal - was conducted in May 2002 to gather data on poverty indicators. Principal Component Analysis was used to construct an index of the standard of housing, which was then combined with variables measuring other symptoms of poverty (income, wealth and health) in a Cluster Analysis of the households. This revealed five clusters representing four distinct groups of poverty; households relatively income and asset rich, income rich but asset poor, asset rich but income poor and households with the lowest incomes and assets. Linear Discriminant Analysis was then used to distinguish the households that were relatively income and asset "rich" from those that were relatively income and asset poor, and those that were relatively income poor but "asset rich" from those relatively asset poor but "income rich". The main distinguishing indicators were found to be gender of the household head, family size, dependency ratio, education and access to markets. These findings show that there is a need to increase child welfare grants as pension earnings become less effective (due to decreasing life expectancy and high levels of dependence on pensions as a source of income) in the short run. In the long run, there is a need for increased education and vocational training - especially for women along with better access to transport, jobs and banking facilities (to mobilise savings).