Understanding consumption patterns of the established and emerging South African black middle class
Stellenbosch Working Paper Series No. WP14/2014Publication 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)
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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11 Oct 2024The domestic data releases were mixed this week, with a downtick in manufacturing in August and mining output looking a little better. There were some positive steps on the reform front, but also disappointments, with a setback on port reform. The international economic newsflow focussed on the US monetary policy outlook, with markets now scaling back...
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