Monthly expenditure category fluctuations and trade-off in South Africa bottom of the pyramid households

Type Thesis or Dissertation - Doctor of Philosophy
Title Monthly expenditure category fluctuations and trade-off in South Africa bottom of the pyramid households
Publication (Day/Month/Year) 2017
This exploratory study investigated changes in the allocation of household
expenditure between various product or service categories in a sample of South
African low-income or ‘bottom of the pyramid’ (BoP) households. First, the mixed
methods research quantified the monthly income and expenditure fluctuations in the
sample of households over a period of four months. In addition, the study identified
and quantified expenditure category trade-offs in the target households. Finally, a
qualitative inquiry explained the reasons for the fluctuations and the trade-offs
identified in the first two components. The study was based on the existing BoP
proposition and specifically focused on BoP consumer decision-making theory.
Methodologically, the study was a monthly longitudinal panel over four months. The
quantitative component employed a once-off baseline questionnaire to gather
household data. The participating households then completed monthly self-complete
financial diary questionnaires that recorded both income and expenditure. The
qualitative component involved interviews with representatives from the participating
households and provided details to explain the underlying causes for changes in
monthly expenditure patterns. The study was conducted in four provinces with eighty
BoP households participating in the research.
The study found significant variation in both household income and expenditure
between months. The variation and consequent trade-offs between expenditure
categories was caused by calendar-related phenomena (such as the festive season),
income shocks, unforeseen expenses and spreading the household budget over
multiple months. In addition, large fluctuations in income resulted in a constantly
shifting allocation of expenditure to categories that required the most attention at a
particular point in time. Informal savings (stokvels) and micro-enterprise expenses
also contributed to fluctuations in income and expenditure.
This study provides unique insights that fill a vacuum in the current body of academic
and industry knowledge for this segment of close to forty million BoP South Africans.
No study of this nature has been published in either South African or international

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