Poverty at the household level: A review of theory and South African evidence

Black P. (2004)

Article

This paper focuses on the allocation of household resources among the poor in South Africa, looking at both the theoretical issues and the empirical findings of recent research work. Distinguishing between Becker's unitary household and some of the non-consensus models, the paper first considered the relationship between job search and household income, and then looked at household expenditure and how it may affect the health status of poor households - which, it was argued, can be compromised by a preponderance of inferior (or low quality) goods in the expenditure patterns of households getting poorer. Poor households also invest in the education of their children, partly to help them become informally employed or perform important household tasks, and also to secure a future return in the form of remittances paid by educated migrant workers. The focus then shifted to the intra-household allocation of resources, where a distinction was made between consensus models of household behaviour, in which at least one parent - usually the head - is assumed to be altruistic, and non-consensus models, in which parents have conflictual interests and where outcomes can be either cooperative or non-cooperative. Cooperative Nash equilibria are often reached through threats of divorce, whilst non-cooperative outcomes are characterized by predatory behaviour and by an underprovision of public goods on the part of individual members of households.

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