Browsing by Author "Hofmeyr, Andre"

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    A taxometric analysis of problem gambling data from a South African national urban sample
    (Journal of Gambling Studies, 2015-05-28) Kincaid, Harold; Daniels, Reza Che; Dellis, Andrew; Hofmeyr, Andre; Sharp, Carla; Rousseau, Jacques; Ross, Don
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    Open Access
    Analysing Risk Preferences and Time Preferences with respect to Smoking Status and Smoking Intensity
    (2019) Preston, Charles; Hofmeyr, Andre; Kincaid, Harold
    Smoking is a leading cause of death worldwide, and thus the behavioural components need to be understood to mitigate the damage caused by the practice. The relationship between smoking and factors such as risk preferences and time preferences has been the subject of a growing body of literature. This paper evaluates experimental data from smokers and nonsmokers at the University of Cape Town collected in 2016 and 2017. Maximum likelihood estimation is used to estimate models of risk preferences and time preferences. The results highlight that smokers are less risk averse than non-smokers; that smokers discount more heavily than non-smokers; that greater smoking intensity is correlated with lower risk aversion; and that greater smoking intensity is not related to discounting behaviour. In some specifications the relationship between smoking intensity and risk aversion is parabolic, and as such moderate smokers are less risk averse than heavy smokers and light smokers. In conclusion, smokers tend to discount more heavily than non-smokers, and lower smoking intensity is associated with greater risk aversion than higher smoking intensity.
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    Decomposing trust into risk preferences, altruism, and subjective beliefs: An experimental analysis
    (2019) Beattie, Tarryn; Hofmeyr, Andre
    There is a sizeable economic literature dedicated to understanding trust and the extent to which it influences decision making. Although trust is difficult to measure, experimental economics has commonly used the 'amount sent’ in the Berg, Dickhaut and McCabe (1995) investment game to elicit levels of trust from players of the game. However, there is a growing body of literature suggesting that factors such as risk preferences, altruism, and subjective beliefs may confound this measure of trust, thereby questioning the validity of using the 'amount sent’ to elicit people’s levels of trust. To understand these factors, we designed and conducted an incentive-compatible economic experiment with students from the University of Cape Town. These participants completed the investment game, the dictator game (to measure levels of altruism), and a random lottery pair risk preferences task (to gauge risk preferences). We also included an information treatment where students were shown the conditional distributions of amount sent decisions made by students in the previous, baseline treatment. This was done to evaluate whether knowledge of the actions taken by other students would ground students’ beliefs and influence the decisions they made. We estimate a set of standard statistical models to gauge determinants of the amount sent and a complementary maximum likelihood estimation approach to estimate Expected Utility models and Rank-Dependent Utility models in order to further evaluate our data. Our results show that caution needs to be taken when using the amount sent as a measure of trust as the relationship between risk preferences and the amount sent is a nuanced one. Moreover, altruism has a statistically significant association with the amount sent and with risk preferences. We also found that those who were part of the information treatment sent significantly more than those who were not, and they were on average also less risk averse. This indicates that while subjective beliefs do influence behaviour in the investment game, they also affect risk preferences. Thus, our results suggest that researchers should not use the amount sent in the investment game as a pure measure of trust because its measurement is confounded empirically by altruism and subjective beliefs, and theoretically by risk preferences.
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    An experimental analysis of the risk-trust confound
    (2017) Chetty, Rinelle; Hofmeyr, Andre; Kincaid, Harold
    The notion of trust has great significance to an economy. Trust is known to be associated with efficient judicial systems, improved government functioning with lower corruption, and better financial outcomes (Johnson and Mislin, 2011). However, many researchers have argued that risk attitudes may confound the measurement of trust because trusting decisions involve outcomes that have only some probability of occurring. This study therefore seeks to question whether risk attitudes predict trusting decisions in the Berg, Dickhaut and McCabe (1995) Investment Game amongst students at the University of Cape Town in 2016. The statistical method adopted is maximum likelihood estimation which accounts for subject errors in decision making. This study finds that having additional information on the past behaviour of trustees does not affect the trusting behaviour of trustors. In addition, the presence of a human trustee, versus a computer, is found to significantly influence behaviour and decisions made by trustors in the trust game. It is also found that subjects are, on average, risk averse with 62% of subjects exhibiting high levels of risk aversion, and females being more risk averse than males. Subjects were also found to subjectively distort probabilities, where subjects would overweight low probabilities and underweight moderate to high probabilities. Expected Utility models and Rank-Dependent Utility models show that risk and trust are statistically significantly related and that the reasons for trusting one's partner may have arisen out of an inner need to simply trust that person. In addition, risk preferences were able to predict trusting decisions in the environment of risk and the environment of trust. Risk and trust therefore go hand-in-hand and it can be argued that trusting decisions are perceived as decisions involving risk. This study therefore finds that trusting decisions are in fact confounded by risk attitudes, so that a subject may be seen as trusting when actually they are just risk-seeking, or seen as non-trusting when they are just simply risk averse.
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    Experimental and self-reported measures of impulsivity: A reconsideration
    (2021) Giger, Aidan; Hofmeyr, Andre
    Impulsivity is a complex construct that most people seem to understand intuitively, but ordinarily struggle to define precisely. This term readily lends itself to everyday definitions, including acting without thinking, rash and quick decisions, and impatience. However, definitional issues regarding this term are widespread across scientific studies. Impulsiveness is often considered as a personality trait or a transient state within the psychology literature, whereby the former either refers to an underlying trait or the product thereof while the latter concerns itself with action or choice impulsivity. Additionally, economists typically only consider impulsivity that would be referred to by psychologists as choice impulsivity. We sought to better understand the relationship between self-reported impulsiveness as commonly measured by psychologists and incentivised impulsivity tasks as commonly used by experimental economists. Analysing data collected in 2012, we consider how a risk preference task and a time preference task are related to the Barratt Impulsiveness Scale-11 (BIS-11). We conduct joint maximum likelihood estimation to estimate discounting and risk preference parameters, and compare them to the BIS-11 total score and subscales. Our results show that the BIS-11 is related to time preferences, while only the motor impulsiveness and nonplanning subscales of the BIS-11 are related to risk preferences. These results suggest that the BIS-11 is not a direct substitute for experimental economic tasks when assessing impulsivity.
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    A historical analysis of the West Coast rock lobster fishery in South Africa with forward-looking implications for policy
    (2013) Meehan, Brendan; Hofmeyr, Andre
    The newly formed Food and Agriculture Organization (FAO) began collecting data on fisheries in the early 1950s. At this time, the industry faced a period of extremely rapid expansion. Throughout the 1950s and 1960s the growth of yields far exceeded human population growth while fisheries remained largely intact.
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    Income Inequality, Reciprocity and Public Good Provision: An Experimental Analysis
    (Southern Africa Labour and Development Research Unit, 2015-05-28) Hofmeyr, Andre; Burns, Justine; Visser, Martine
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    Racial discrimination in post-apartheid South Africa : an experimental analysis
    (2008) Hofmeyr, Andre
    Includes bibliographical references (leaves 69-74).
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    Social networks and ethnic niches: an econometric analysis of the maufacturing sector in South Africa
    (2010) Hofmeyr, Andre
    This paper analyses the link between social networks and ethnic occupational niches in the manufacturing sector in South Africa. To this end, it employs the methodology of Bertrand et al. to minimise the omitted variable bias induced by standard approaches investigating network effects and adopts Model's concentration index to define an ethnic niche. The results indicate that 25% of the sample is employed in ethnic niches in the manufacturing sector, but that niche employment varies markedly by language group. In addition, certain language groups tend to be clustered in advantageous niches where monthly income and skill levels are relatively high, while others occupy disadvantageous niches where monthly income and skill levels are relatively low. A number of different econometric specifications find strong evidence of social network effects. This highlights the role that these networks play in forming ethnic niches in the manufacturing sector in South Africa.
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    The impact of risk and time preferences on smoking behaviour in the context of a contingency management programme
    (2021) Carnegie, Tyryn; Hofmeyr, Andre
    While there is an established body of research examining risk preferences, time preferences and smoking behaviour, there is little literature exploring the relationship between risk preferences, time preferences, and smoking cessation contingency management (CM) programmes. This dissertation evaluates a CM study and its effect on smokers' ability to quit and smoking intensity, together with their risk and time preferences. The experiment comprises 87 University of Cape Town students wanting to quit smoking, randomly assigned into treatment and control groups. Risk and time preferences are elicited at the beginning of the programme, using incentive-compatible decision-making tasks. The relationship between the individuals' risk preferences, time preferences, and smoking outcomes is explored using two general approaches: standard statistical models and structural models. In the structural models, maximum likelihood estimation is used to estimate time preference parameters jointly with risk preference parameters. Results are broadly consistent across the two approaches. With respect to abstinence, the statistical model suggests that the likelihood of abstinence increases with discount rates, while the structural models suggest CM reduces the effect that time preferences have on abstinence. Neither approach finds a difference in risk preferences between abstinent and non-abstinent participants. In terms of smoking intensity, both approaches unexpectedly find smoking intensity to increase with risk aversion, and neither approach finds a relationship between smoking intensity and time preferences.
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    Two sides of the same coin: Re-examining nepotism and discrimination in a segmented society
    (Review of Social Economy, 2015-05-28) Hofmeyr, Andre; Burns, Justine