ANALYSIS OF RURAL HOUSEHOLD CONSUMPTION EXPENDITURE IN SOUTH AFRICA: THE CASE OF FOOD PLOT HOLDERS IN TYEFU IRRIGATION SCHEME IN THE EASTERN CAPE PROVINCE

Policy formulation in relation to rural development requires research on rural household consumption behaviour and patterns. In this paper research implications of consumption function theory in relation to rural household expenditures are briefly outlined and results of a cross-section analysis of seven expenditure categories of food plot holders at Tyefu Irrigation Scheme are reported. Consumption function parameters are estimated by ordinary least square method of regression of farm account data. The analysis reveals that the sampled food plot holders have a marginal propensity to consume of (0.349) as well as average propensity to consume of (0.652). Family characteristics (used as explanatory variables) such as age distribution and family size vary in their ability to explain expenditure patterns depending upon types of commodity. Further research will help to rigorously assess the impact of additional forces such as education, location, farm assets, etc. upon the standard of living of farm people