All over the world, the level of poverty is increasing. In South Africa it is mainly concentrated in rural areas and differs significantly from whether considering race, sex, provinces or community areas. This dissertation studies the relationship between poverty and inflation in Sharpeville by determining the impact of rising prices on the poor households in Sharpeville. The study focuses on three areas, namely the theoretical background of poverty and inflation, the impact of rising prices in expenditure patterns and the relationship to poverty. There are different approaches in defining poverty. Poverty can either be absolute or relative. For the purpose of this study, poverty is defined as absolute. Thus the study defines individuals as poor due to their inability to attain a minimum material standard of living. This minimal standard of living is normally referred to as the poverty line. Inflation may be defined in different ways. For the purpose of this dissertation, inflation is defined as the rise in the general price levels over a specific period of time. Changes in expenditure patterns are caused by an increase in inflation. This study uses the regression model to determine the impact of inflation on poverty in Sharpeville. According to the macroeconomic theory’s implication, the same level of inflation on the same basket of commodities has a different level of effect on each household. Accordingly, in this study, all households are assumed to be faced with the same inflation rate. Household size is positively related to poverty gap squared. This means that the more members there were in a household in Sharpeville the poorer they were. Households with the highest number of members were poorer than those with few members. Statistically, the null hypothesis that there is no relationship between household size and poverty gap is rejected, even at the 1% level of significance. EXPINFL is negatively related to poverty gap. The correlation matrix confirms the results in the regression analysis. The correlation coefficient between The relationship between poverty and inflation in Sharpeville Page EXPINFL and PGAP is -0.34467. Although it is relatively weak, the fact that there is a negative correlation confirms that inflation negatively affects poverty. Finally, the study recommends that government provides more job opportunities for the individuals without any source of income in Sharpeville. The government could also provide business funding to the unemployed individuals to enable them to start their own businesses. This would enable those individuals to create additional employment. In addition, measures should be introduced to determine the effect of inflation on those households who are not employed (that is, not receiving any form of income, not even through any form of grant), but do benefit from some form of feeding scheme administered by either government or non-profit organisations. / MCom, Economics, North-West University, Vaal Triangle Campus, 2012

All over the world, the level of poverty is increasing. In South Africa it is mainly concentrated in rural areas and differs significantly from whether considering race, sex, provinces or community areas. This dissertation studies the relationship between poverty and inflation in Sharpeville by determining the impact of rising prices on the poor households in Sharpeville. The study focuses on three areas, namely the theoretical background of poverty and inflation, the impact of rising prices in expenditure patterns and the relationship to poverty. There are different approaches in defining poverty. Poverty can either be absolute or relative. For the purpose of this study, poverty is defined as absolute. Thus the study defines individuals as poor due to their inability to attain a minimum material standard of living. This minimal standard of living is normally referred to as the poverty line. Inflation may be defined in different ways. For the purpose of this dissertation, inflation is defined as the rise in the general price levels over a specific period of time. Changes in expenditure patterns are caused by an increase in inflation. This study uses the regression model to determine the impact of inflation on poverty in Sharpeville. According to the macroeconomic theory’s implication, the same level of inflation on the same basket of commodities has a different level of effect on each household. Accordingly, in this study, all households are assumed to be faced with the same inflation rate. Household size is positively related to poverty gap squared. This means that the more members there were in a household in Sharpeville the poorer they were. Households with the highest number of members were poorer than those with few members. Statistically, the null hypothesis that there is no relationship between household size and poverty gap is rejected, even at the 1% level of significance. EXPINFL is negatively related to poverty gap. The correlation matrix confirms the results in the regression analysis. The correlation coefficient between The relationship between poverty and inflation in Sharpeville Page EXPINFL and PGAP is -0.34467. Although it is relatively weak, the fact that there is a negative correlation confirms that inflation negatively affects poverty. Finally, the study recommends that government provides more job opportunities for the individuals without any source of income in Sharpeville. The government could also provide business funding to the unemployed individuals to enable them to start their own businesses. This would enable those individuals to create additional employment. In addition, measures should be introduced to determine the effect of inflation on those households who are not employed (that is, not receiving any form of income, not even through any form of grant), but do benefit from some form of feeding scheme administered by either government or non-profit organisations. / MCom, Economics, North-West University, Vaal Triangle Campus, 2012

Foreign aid has been used on the one hand by donors as an important international relations policy tool and on the other hand by developing countries as a source of funds for development. Since its inception in the 1940s, foreign aid has been one of the most researched topics in development economics. This study adds to this growing aid effectiveness literature, with a particular focus on the under-researched relationship between foreign aid and extreme poverty. The main empirical assessment is based on a sample of 120 developing countries from 1981 to 2013. The study had two main objectives, namely: (i) to estimate the impact of foreign aid on poverty reduction and (ii) to examine the direction of causality between foreign aid and poverty in developing countries. From these two broad objectives, there are six specific objectives, which include to: (i) examine the overall impact of foreign aid (total official development assistance) on extreme poverty, (ii) investigate the impact of different proxies of foreign aid on the three proxies of extreme poverty, (iii) assess whether political freedom (democracy) or economic freedom enhances the effectiveness of foreign aid, (iv) compare the impact of foreign aid on extreme poverty by developing country income groups, and (v) examine the direction of causality between extreme poverty and foreign aid. To achieve these objectives, the study employed two main dynamic panel data econometric estimation methods, namely the systemgeneralised method of moments (SGMM) technique and the panel vector error correction model (VECM) Granger causality framework. While the SGMM was used to assess the impact of foreign aid on extreme poverty, the panel VECM Granger causality was used to examine the direction of causality between foreign aid poverty. The SGMM was used because of its ability to deal with endogeneity by controlling for simultaneity and unobserved heterogeneity, whereas the panel VECM was preferred because the variables were stationary and cointegrated. / Economics / D. Phil. (Economics)