Africa Check (Johannesburg)

1 October 2013

South Africa: Bling Culture? Do South Africans Really Prefer Smart Clothes to Good Schools & Health? What a Recent Study Left Out

analysis

Media reports last month made a series of striking claims about what South Africans prioritise. The reports were based on one consultancy firm's analysis of spending data. We checked it out.

Reports in the media last month conjured up a striking image of what South Africans want in life.

"The South African dream," reported Times Live, "is more about buying a car than owning a house. And we are spending less on education than on clothing."

"Spendthrift SA: We want better clothes, not better education" ran the headline of a piece on eNCA, written almost word for word the same as the one in the Times.

The articles offered a few specific numbers to back up the headline claims. "Households with an income of less than R3500 a month are spending 8% of it on clothing and footwear - more than on education and health combined," they declared.

People spend as much on their TV subscriptions as on their retirement annuities, they said. The poorest spend more on cell phones and airtime than schools. Even the wealthiest, they suggested, spend only about 4% of their income on education.

All in all, the claims led one commentator to worry that South Africans are scorning education and even health, focusing instead on what he called "bling spending".

What is the evidence?

According to the articles, the information comes from a media briefing sent out by a data analysis firm called Eighty20 to promote one of its paid-for reports.

The analysis is based on data from Stats SA's Income and Expenditure of Households 2010/2011 survey plus other sources such as company results, they said.

So what do the numbers suggest?

According to the Stats SA figures, South African households do indeed spend on average more on clothing and footwear than on education or health. Households, according to these figures, devote 4.5 percent of monthly spending to clothing themselves while just 2.7 percent goes on education and 1.4% on health.

Furthermore, as a rule, the lower the income group a household is in, the less it spends both in real terms and proportionally on those two key areas. In the lowest income groups, spending on clothing and footwear is indeed higher than the combined spending on health and schooling.

What the analysis excludes

Let's start with spending on health. As Stats SA makes clear, its estimate of average household spending on "health" is low, in part at least, because its definition of spending on health excludes medical aid contributions and medical insurance which fall under its "miscellaneous expenditure" category.

Stats SA's "health expenditure" statistics, used by Eighty20 and referred to in these articles as "spending on health", cover only out-of-pocket expenditure by households. This clearly understates true household spending on health.

Indeed, an analysis of household income and spending patterns in 2011, by the Bureau of Market Research (BMR) of the University of South Africa, looked at health spending and came away with much higher figures.

According to the BMR study, South African households devoted on average 6.9% of their total expenditure to health - significantly more than the 5.3% they spend on clothing, footwear and accessories. It also found South African households spending, on average, 3.9 percent of income on education.

Spending on schools & health is lower among poor

As said above, it is clear that, as a rule, the proportion of income spent on health and schooling does indeed decline, the lower a household's income bracket.

As Servaas van der Berg, Professor of Economics at Stellenbosch University, told Africa Check this reflects the fact that those on the lower incomes have access to public school facilities and does not necessarily reflect the importance they attach to schooling or health.

"That tells us only about spending, not the priority that people may attach to education," Professor van der Berg said.

"For example, parents value education a lot, as is evident from their sending their children to school in large numbers. We have an exceptionally high enrolment rate for a middle income country."

Some services are free so spending a poor indicator

When some services come for free, spending patterns are not a good indicator of people's priorities, Jos Kuper, director of the social market research firm Futurefact, agreed.

"There is no such thing as public access to clothing and footwear so they don't have discretion in those areas. They and their families have to be clothed and fed. When they need educational and health facilities, there is public access," Kuper told Africa Check.

And of course, for most South Africans, school education is provided free and the National Student Financial Aid Scheme funds a number of university students through loans and bursaries.

Eighty20 acknowledges this point: "Government's range of free services offered to lower income households includes education, public health, and free rates and services - which all create extra discretionary income to spend on other products and services provided by the private sector."

Given this, it is worth noting that, even according to the Stats SA figures, South African households spend on average more of their monthly income on education than the 2.1 percent spent by households in both the United Kingdom and the United States, the 1.7 percent in Canada, and the different shares spent in most other African countries.

Conclusion - The data does not back up the claims

The fears of a "bling" spending culture have been exaggerated.

By choosing to base its calculation of household health spending on the Stats SA figure for "health expenditure", when this specifically excludes spending on medical aid contributions and medical insurance, the Eighty20 study clearly understates average household spending on health.

And on schooling, both Stats SA and the BMR study also find South African households devoting more of their spending to education than households in the United States, the UK, Canada and other countries in Africa.

Doubtless, there are some big spenders out there, racking up the bill on luxury items.

But, as Jos Kuper explained, the concept of using spending data to assess priorities when people have to pay for some goods but not for others is clearly a flawed one. Other criteria such as enrolment levels in school are clearer indicators of the priority given by households to, for example, schooling.

They show higher than average levels for a middle-income country such as South Africa.

Edited by Ruth Becker and Peter Cunliffe-Jones

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