An Important Factor in Translating Monetary IncomeEssay Preview: An Important Factor in Translating Monetary IncomeReport this essayAn important factor in translating monetary income into some measure of welfare is the set of prices facing households. Identical households with identical monetary incomes may appear to be in the same position in terms of welfare, but this would only be the case if they face the same set of prices. If one of these identical households is required to pay higher prices than the other, the formers welfare will be lower than the latters. This may result in the misidentification of technically poor households as non-poor and/or vice versa. Thus, when estimating poverty lines and measuring poverty, the different sets of prices facing different households should ideally be taken into account. One of the important sources of price variations across households derives from geography: households in different regions may face different price sets because of different local tastes and preferences, transport costs, climatic and agricultural differences, and demand patterns. One important facet of spatial price differentials is the difference between urban and rural prices, although there is likely demand from policymakers and officials for poverty lines tailored to more detailed geographical units, such as for individual provinces, or for metropolitan, urban and rural areas within provinces. This is particularly relevant in South Africa given that inequalities inherited from the apartheid system have a clear spatial dimension.As noted above, one of the data issues that has arisen in the 2005 Income and Expenditure Survey is a probable underestimate of food expenditure. Such an underestimate would serve to bias the non-food component of the absolute poverty line upwards, resulting in an upwardly biased poverty line. Another issue that impacts on the food component of the derived absolute poverty line relates to consumption of home production.
The IES 2005, like its predecessor, is unable to accurately quantify consumption of home production (in quantity terms). Although the questionnaire makes provision for the consumption of home production, it only records a respondent-assigned value of the consumption, with no quantity
information, which would allow for direct estimation of calories, being included in the released dataset. The use of data on the average sales price per quantity is not a feasible option since there is no evidence to suggest that respondents both know ruling market prices per quantity and value the consumption of home production accordingly. Furthermore, it is highly likely that there exist regional price variations for which it is not possible to make adjustments. This is a critical defect in the design of the questionnaire for the 2005 IES as it relates to poverty work, impacting negatively on the ability to accurately estimate a consumption-based poverty line using the IES. Specifically, the analysis is forced to omit consumption of home production: the result will be
The methodology of the respondents in the 2005 IES-2005 and the current research projects is consistent with existing research (13) on the effects of non-living consumption on health and disease. However, such data, although not comparable to the current analysis, do not provide a clear indication whether health and disease are related (14) or related to different types of goods. Thus, it is better to examine consumption as a variable for a series of categories of goods or services, such as housing or a healthcare facility. While the research has found little associations in such categories as food or the provision of safe drinking water, a number of health effects have also been noted. For example, exposure to antibiotics in the environment may lead to anaphylaxis, a serious infection, chronic pain, and fatigue, which can lead to serious health complications. Indeed, the link between increased and decreased risk of morbidity and mortality associated with increased consumption of the “other” category of goods has recently been demonstrated in studies on the health impacts of a wide range of foods such as fruits and vegetables.
However, if an increasing share of consumers are less concerned about health-related variables and less concerned with a consumption of the “other” category of goods or services, these health effects will have negligible impacts on the consumption of such goods. Moreover, when consumption of goods is directly related to other goods and services, a significant association between the two can be expected (15). In this respect, the survey methodology was not supported particularly by studies of the effect of housing on health. Furthermore, it may be that a large proportion of the respondents to the survey have never received medical care, as they were never considered suitable for home consumption by the IES. Such an assumption is based heavily on the fact that many of the respondents took part in household surveys in which the household was based and were not representative of the wider population. While this is certainly possible, the survey methodology does not take into account households as an important factor in the estimation of family incomes.
What is the relevance of this research? For those who care about the safety of housing and are worried about increasing risks of infectious respiratory failure, the present study indicates that the current data are useful for providing a more detailed assessment of how the household experience of household health has changed. On the one hand, this small sample size and small sample size may well have reduced methodological problems in examining population health and could have addressed some of the problems associated with the research project and in the study. However, on the other hand, there is no such limitation as to the use of this data for the purposes of this survey, as many of the data examined are not representative of full population size. On the other hand, it is worth noting that the respondents to the survey are not particularly knowledgeable about the current literature on household health concerns and have provided significant research that has not been based on representative population data. A further disadvantage is that data for health related items such as alcohol were not collected. Even when they were collected, the data for such items are limited because most people did not know that the survey was conducted and thus did not know the information needed for estimation.