1. AN ANALYSIS OF HOUSEHOLD EXPENDITURE AND INCOME DATA
Dr. Pali Lehohla

2. Background Household – based sample survey
Data collection covers a period of 12 month
October 2014 to October 2015
Conducted once every 5 years
Previous LCS conducted 2008/2009
Countrywide survey

3. 01 02 03 Objectives To profile poverty and inequality in South Africa
To serve as in input in the reweighting of the CPI basket of goods and services 03
To inform the development, benchmarking and maintenance of household national accounts

4. Subjective Poverty Report Men, Women and Children report
Future products from LCS 2014/15
Poverty Trends Report
Subjective Poverty Report
Men, Women and Children report

5. Linkages to the NDP and SDGs
Reduce the population living below the lower-bound poverty line (LBPL) to 0% by 2030
Reduce Gini coefficient to 0.6 by 2030
Increase the share of national income of the bottom 40 percent from 6 percent to 10 percent
Raise per capita income from R in 2010 to R by 2030

6. Linkages to the NDP and SDGs
Goal 1
Goal 2
Goal 10

7. Methodology
Combination of diary and recall methods were used for collecting data
Data collection instruments
Household Questionnaire (HHQ)
Reflects households’ acquisitions of semi durable and durable items (and other household information) during the 12 months prior to the survey period
Weekly Diary
Reflects households’ daily acquisitions for the survey period and payments on semi-durable and durable items during the survey year
A household completes a diary for the period of two weeks

8. Higher non-response rates
Limitations
Respondent fatigue often leads to under-reporting on frequently purchased items (food, beverages, personal care items)
Higher non-response rates
Respondents have difficulty estimating their dwelling units value

9. Response rates Province LCS 2014/2015 (%) South Africa 84,9
Western Cape
79,1
Eastern Cape
92,7
Northern Cape
90,4
Free State
86,9
KwaZulu-Natal
89,6
North West
90,0
Gauteng
65,3
Mpumalanga
91,6
Limpopo
95,6
The challenge of non-response was especially problematic in Gauteng
Gauteng accounts for over a third of all household expenditure in the country
Lower responses, especially amongst high-income households in Gauteng, means we could see larger underreporting

10. Spending Patterns In South Africa

11. Income and expenditure

12. HOUSEHOLD INCOME
In 2015, total annual household income by South African households amounted to R2.3 trillion
Average annual household income was R
Median income R54 349

13. Average annual household income by province

14. Average annual household income by sex of household head
Males
Females R
R98 911
Male-headed households earned significantly more than female-headed households in 2015

15. Average annual household income by population group of household head
White
Indian
Coloured
Black African
Average annual income (Rands)
Average Income

16. HOUSEHOLD EXPENDITURE
In 2015, total annual household expenditure by South African households amounted to R1.72 trillion
Average household consumption expenditure was R
Median expenditure R42 522

17. Average annual household consumption expenditure and income by population group of household head
White-headed households (R ) spent five times more than black African-headed households (R67 828) and three times more than the national average
White
Indian
Coloured
Black African
Average Expenditure
Average Income

18. Average annual household consumption expenditure by provinceLP
R61,011 GP R MP
R83,517 NW
R69,192
R85,298 FS
KZN
73,503 NC
R81,258 EC
R72,390 WC R
Households in Western Cape (R ) spent more than twice the amount spent by households in Limpopo (R61 011) and North West (R69 192).

19. Average annual household consumption expenditure by settlement type
Urban Informal
R38,739
Traditional Areas
R44,710
Rural Formal
R75,349
Urban Formal
R140,617
Households in urban formal areas (R ) spent almost four times more than households in urban informal areas (R38 739) and three times more than households in traditional areas (R44 710)

20. Average annual household consumption expenditure by sex of household head
Males
Females
Male-headed households spent one and half times more than female-headed households

21. Highest Fourth Middle Second Lowest
Percentage distribution of households by expenditure per capita quintiles and population group of the household head
Highest
Fourth
Middle
Second
Lowest
Almost half of black African-headed households (46,58%) fell within the lowest two expenditure quintiles combined

22. Inequality is also found within Population Groups

23. Average annual household consumption expenditure by population group of household head Median vs Mean R
Coloured
Mean
Median
R65975 R
White
Median
Mean R
Mean
R67 828
Black African
Median
R36 501
Mean R
Indian
Median R
Rands ‘000

24. Distribution of household consumption expenditure by expenditure groups

25. Food and non-alcoholic
Percentage distribution of total annual household consumption expenditure by top 4 expenditure groups
In 2015, total annual household expenditure by South African households amounted to R1.72 trillion
Housing and utilities amounted to approximately R558.8 billion in monetary terms (32,6%)
Food and non-alcoholic
Beverages
(12,9%)
Transport was the second largest main expenditure group(16,29%)
Miscellaneous goods
and services (14,7%)

26. Historical Spending Patterns In South Africa from 2006 to 2015
Housing remained the largest contributor since 2009

27. Alcoholic bev. tobacco and narcotics,
Current Spending Patterns In South Africa:2015
Alcoholic bev. tobacco and narcotics,
0.9
Education,
2.5
Health,
Restaurants and hotels,
2.1 *
Clothing and footwear,
4.8
Communication,
3.4
Furnishings household equipment and routine maintenance of the house, 5.2
Recreation and culture,
3.8
Food and non-alcoholic beverages,
12.9%
Housing water electricity gas and other fuels,
32.6%
Miscellaneous goods and services,
14.7%
Transport,
16.3%
*Other unclassified Expenses, 0.1

28. Significant differences exist in proportions of certain categories between the lowest and highest expenditure deciles
Expenditure Categories
Decile 10
Decile 1

29. selected expenditure categories examined
Household Consumption Expenditure
selected expenditure categories examined

30. Average annual consumption expenditure on food, beverages and tobacco by province
Households in the Western Cape (R20 976) spent almost double the amount that households in Limpopo (R10 862) spent on this category

31. Proportion of total annual household consumption expenditure on food, beverages & tobacco by selected population group of household head
Average for All Population Groups
13,75% (R14 202)
Black African
17,9%
White
7,1%
(R12 163)
R24 998
Black African-headed households had the highest proportion (17,93%) across all population groups, while white-headed households spent the most in monetary terms (R )

32. Urban Formal Rural Formal Traditional Areas Urban Informal
Proportion of total annual household consumption expenditure on clothing and footwear by settlement type
Urban Formal
Rural Formal
Traditional Areas
Urban Informal
Households in urban informal areas (9,03%) consumption expenditure was almost twice the proportion of the national average (4,78%), while urban formal areas (4,21%) had a proportion that was below the national average

33. Proportion of total annual household consumption expenditure on housing, water, electricity, gas and other fuels by province
Housing has the largest share of household consumption expenditure, South Africans spent almost a third (32,55%) of their average annual household consumption expenditure on this expenditure category

34. Proportion of total annual household consumption expenditure on housing, water, electricity, gas and other fuels by province
33,1%
32,3%
Male headed households spent on average R more than their female counterparts, although female-headed households (33,14%) consumption expenditure has a slightly greater proportion as compared to male-headed households (32,29%)

35. Average annual household consumption expenditure on health by province
On average Western Cape spent R2 107 per annum which is seven times more than Limpopo (R287)

36. Proportion of total household consumption expenditure on transport by settlement type
Urban Formal
Traditional Areas
Rural Formal
Urban Informal
Households in urban informal (18,66%) and rural formal (18,65%) areas spent the highest proportion of expenditure on transport as compared to other settlement types

37. Proportion of total household consumption expenditure on education attributed to public and private institutions by population group of household head
Coloured-headed households spent 77,6% on public educational institutions, while Indian/Asian-headed households only spent 53,2%

38. Conclusion
In 2015, on average household consumption expenditure amounted to R , while average annual household income was R
Black African-headed households accounted for over half (52,8%) of all household consumption expenditure
in 2015 and spent on average R67 828
Western Cape and Gauteng combined accounted for the majority of the total household consumption expenditure (57,8%)
In terms of average annual consumption expenditure, households in Western Cape are the richest (R ) while the poorest province was Limpopo (R61 011)
In 2015, on average men earned almost twice of what women earned from work, R and R respectively