Spatial poverty and inequality in South Africa: A municipality level analysis

Using the 2011 South African population census, we provide income and multidimensional poverty and inequality estimates at the municipal level. We go on to estimate a spatial econometric model to identify the correlates of poverty across municipalities in South Africa. Our results show that both income and multidimensional estimates of poverty and inequality vary significantly across municipalities in South Africa. In general, areas that are historically characterized by low economic and welfare outcomes still experience significantly higher poverty and deprivation levels. Using both global and local spatial autocorrelation measures we find significant and positive spatial dependence and clustering of regional development indicators. The situation of poverty is both spatially unequal and autocorrelated. Results from our spatial econometric analysis indicate that there is a negative and significant relation between the municipal poverty levels and local levels of education and economic activity (GDP per capita). We also find a significant and positive relationship between municipal poverty levels and local inequality levels, suggesting that municipalities with higher levels of inequality also have higher incidences of poverty. In contrast, natural geographic factors such as rainfall and temperature are not significantly related to municipal poverty.