We investigate the formation of minimum income aspirations in South Africa, a country with high rates
of poverty together with very high and rising rates of inequality. A number of empirical studies in both
developed and developing countries have shown that income aspirations increase with the individual’s
own income and with the income of others in their community, relationships which are explained by
processes of adaptation through habituation and social comparison. However, the relationship between
income aspirations and inequality has received far less empirical attention. We analyse the minimum
income question (MIQ) asked in nationally representative household survey from 2008/2009 to test for
evidence of aspirations failure among the poor in South Africa, and to investigate whether high levels
of local inequality dampen or stimulate minimum income aspirations, and particularly among those
living in poverty.