In letters published in Business Day in November 2007, Ken Owen berated the South African Institute of Race Relations for highlighting poverty trends using a ‘phony’ purchasing power parity (PPP) exchange rate. But there is nothing phony about the PPP rate. It is less volatile than the market exchange rate. It is also the rate used in the World Bank’s most recent report on poverty levels in different countries.   

Owen complains that we did not compare our data with Statistics South Africa’s Community Survey. That survey was not yet out when ours was compiled, although we issued a press release highlighting similar improvements in living conditions portrayed in earlier surveys by Stats SA. But to compare this data with income data would have been misleading. Neither poverty nor income appears among the key data issued by the Community Survey.  

Owen claims that we relied on two ‘commercial surveys’ that changed methodology between surveys. However, for the data in question we relied on only one source, Global Insight Southern Africa. As a non-political data provider, Global Insight uses a range of sources and assumptions in the compilation of its data. It relies on a sophisticated income and expenditure model that accounts for known data problems in primary data sources.       

Owen himself then goes on to use a ‘commercial’ survey, but he misrepresents, or misunderstands, it. He attacks the Institute for not reconciling our data on poverty with Living Standards Measures (LSMs) compiled by the South African Advertising Research Foundation. The reason for our not doing so is that LSMs monitor living standards, not poverty. LSMs do not track incomes either. Nor, says the SAARF, are they even an ‘alternative label for income’. LSMs also exclude children, whereas our data encompasses the whole population. 

Perhaps Owen cannot be blamed for making so fundamental a mistake as to use LSMs as income measures. It is clear that he merely reproduces the statements made by Miriam Altman of the Human Sciences Research Council. In accordance with his latest ideological slant, he has elevated her into an ‘authority on poverty’ on the basis of nothing other than her ill-informed attack on the Institute. *