Minimum Living Level and Consumer Price Index: What's in a name?

Abstract

The Minimum Living Level (MLL) denotes the minimum financial requirements of members of a household to maintain an acceptable living standard, which is above the Poverty Line. Sufficient quantities of relevant expenditure items based on minimum health standards are allowed for when calculating the MLL, but rational expenditure on them is assumed. The MLL is measured in monetary value. The Consumer Price Index (CPI) is a measurement of changes in the prices over time of a basket of typical consumer goods and services and is measured by an index or percentage. The basket of expenditure items used in the CPI depends on household expenditure surveys. This article sets out to differentiate between the MLL, CPI and the Poverty Line, since the latter and the MLL are sometimes used in the same context in South Africa.