Understanding consumption patterns of the established and emerging South African black middle class

Stellenbosch Working Paper Series No. WP14/2014
 
Publication date: 2014
 
Author(s):
[protected email address] (Department of Economics, University of Stellenbosch)
[protected email address] (Department of Economics, University of Stellenbosch)
[protected email address] (Department of Economics, University of Stellenbosch)
[protected email address] (Department of Economics, University of Stellenbosch)
 
Abstract:

Existing empirical research on consumption patterns of the South African black middle class leans either on the theory of conspicuous consumption or culture-specific utility functions. This paper departs from treatment of the black middle class as a homogenous group. By differentiating between a securely established group, with characteristics and consumption patterns similar to the white middle class, and an emerging group, often with weaker productive characteristics, it formally introduces economic vulnerability as a driver of consumption patterns. Households new to the middle class or uncertain of continued class membership are viewed as vulnerable. Consumption patterns of the emerging black middle class are observed to diverge substantially from the other groups, in terms of greater signalling of social status via visible consumption and preoccupation with reducing an historical asset deficit. We expect many of its members to join the established classes over time, converging to a new ‘middle class mean’.

 
JEL Classification:

D31, D12, D11

Keywords:

middle class, South Africa, conspicuous consumption

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BER Weekly

17 February 2020
Last Thursday, President Ramaphosa delivered his State of the Nation address (Sona) to parliament. The statement gave recognition to the economic challenges SA currently face, especially regarding electricity supply. More emphasis was placed on the role of the private sector to help solve these challenges. Read more in the Current affairs section. On...

Read the full issue