OpenUCT :: Browsing by Department "School of Economics"

Browsing by Department "School of Economics"

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Open Access
3-month bond option strategies: an analysis of performance from 1998 to 2010 in the South African market
(2011) Ndebele, Ndumiso; Jones, Samantha; Touna-Mama, Albert
Due to the 2008 financial crisis, investors have become more risk averse in investing in equities and have increased their holdings in bonds as they are believed to be less risky. However, South African interest rates have been volatile over the past decade due to changes in the inflation rate. This has caused the returns of bond portfolios to be uncertain since bond prices are inversely related to interest rates. It is thus imperative to manage the interest rate risk inherent in bond portfolios so that institutional investors can achieve their mandates and targeted returns.
Open Access
A Blockchain-enabled System to enhance Food Traceability in Local Food Supply Chains (FSCs) suitable for Small Co-operatives in South Africa
(2021) Kanjere, Julian; Georg, Co-Pierre
Food is vital to human life. Therefore, ensuring its safety as it moves from producer to consumer in food supply chains (FSCs) is essential. This can be achieved through the use of food traceability technology which enables track and trace of produce within a FSC. Recently, blockchain technology (BCT) has shown great potential to enhance traceability in FSCs, owing to its ability to securely store data in a decentralised and tamper-evident manner. However, it appears that research on blockchain-enabled food traceability exists primarily within the context of large FSCs, whilst scarce for local FSCs in which traceability is often an inefficient and manual process. Given this background, this exploratory research is carried out, to investigate whether a blockchain-enabled system can be used to improve traceability in local FSCs. To do this, we (i) collaborate with Oranjezicht City Farm Market (OZCFM) - a farmers market in Cape Town, the smallholder farmers that supply OZCFM with fresh local produce and the OZCFM patrons that purchase the produce; (ii) map out the local FSC by conducting observations and running surveys with the aforementioned actors; (iii) design, develop and pilot FoodPrint - a web based and blockchain-enabled food traceability application. During the pilot within the OZCFM-related local FSC, FoodPrint is used to capture data on the harvest, transportation and storage of produce; and reveal produce provenance at destination by scanning of supplier-produce specific quick response (QR) codes. We find that FoodPrint provides tamper-evident traceability and authentic transparency of produce related data to the local FSC actors. Further, we note that scanning a FoodPrint QR code for produce provenance does not enhance the consumers trust of the local FSC, as it pre-exists. This implies that local FSCs with existing and functional trust mechanisms do not benefit from trust-enhancing mechanisms such as blockchain-enabled traceability. Future work may consider data privacy in FSCs and automating FSC data entry to reduce the risk of fraud.
Open Access
A Critical Assessment of the Sustainability of South Africa's Fiscal Policy and Related Institutional Frameworks
(2019) Ngewana, Azande; Mateane, Lebogang
Historically, there are many examples of countries that have had to deal with the unpleasant consequences of economic mismanagement. A recent example is Venezuela, which has imploded into hyperinflation. It is therefore important to consider the question of fiscal sustainability in the South African context. This study ultimately aimed to test the sustainability of South Africa’s fiscal policy and public debt, with fiscal policy defined as the satisfaction of the intertemporal budget constraint. The Augmented Dickey–Fuller test was used to assess the stationarity of national government revenue and national government expenditure – both expressed as percentages of GDP – while the Engle–Granger test was used to test the residuals of the regression between national government revenue and national government expenditure for a long-run relationship. A long-run relationship was found between these two variables, suggesting that fiscal policy and South Africa’s public debt are sustainable. However, due to weakened institutions, the South African government should remain aware that the country’s fiscal policy could easily move into unsustainable territory.
Open Access
A critical review of the literature on UBI experiments
(2024) Skeyi, Sanele; Ross, Donald; Black, Anthony
A universally guaranteed basic income is said to be a disarmingly simple idea that could help solve the problems associated with economic insecurity. However, sceptics about this idea argue that it is too simple and that despite best intentions, could have adverse results. These possible adverse results include spreading the welfare revenue too widely and too thinly to have a meaningful effect on the poor who need it the most; demotivating people from working, thus expanding poverty and welfare traps and rendering the transfer unsustainable. While politicians and policymakers have been arguing about the merits of this idea, economists and other social scientists have run experiments to help them understand the mechanisms of responses to a guaranteed income and to be able to advise policymakers. While these experiments have been reviewed separately in the literature, they have not been collated and analysed jointly in a systematic manner. These experiments have mostly been in the form of field experiments which have focused on testing the effects of the two main models of delivering a guaranteed income, that is a Negative Income Tax (NIT) and a Universal Basic Income (UBI). While guaranteed income experiments span over half a century and across the world, in both developed and developing countries, only a handful of these meet the criteria of being universal, unconditional, periodic, individual cash transfers. In this paper, we have sampled experiments that either fully met these criteria or fell at least one element short. We critically evaluate how they were designed, carried out, the inferences drawn from the observations they generated, and the validity of those inferences. The experiments reviewed show that a UBI is efficient at reducing exclusion errors; improving welfare outcomes such as poverty, education, and health; and has a gender equalising effect both in households and in the labour market. However, the findings on the effects of a UBI on economic inequality still need further testing. The studies also show that contrary to expectations, a guaranteed income does not incentivise people to choose more leisure, instead they spend more time in education and training, take up care work or pursue entrepreneurial opportunities. We then recommend some aspects of a UBI that require further testing. These include funding mechanisms, the optimum amount and tenure of the guaranteed income, and the consumption behaviour of poor UBI recipients. Lastly, we recommend design imperatives and methodologies for future experimentation. While most of the experiments have been carried out in the field, we make a case for the use of lab experiments to better study the mechanisms of a guaranteed income.
Open Access
A legal and economic analysis of non-fungible tokens on the art market
(2024) Chembezi, Titose; Georg, Co-Pierre
This thesis conducts a legal and economic analysis of Non-Fungible Tokens (NFTs) in the art market, exploring the integration of intellectual property rights and the financial implications of these digital assets. It examines the challenges of applying existing copyright laws, such as the right of first sale and fair use doctrines, to the novel context of NFTs, highlighting the need for enhanced regulatory practices within NFT marketplaces. Proposals include the development of reverse image search technologies to mitigate copyright infringement and foster a more robust legal environment. Economically, the thesis compares the valuation of NFTs to traditional art portfolios, acknowledging the difficulty in assessing their intrinsic value due to subjective perceptions and speculative influences. To counteract speculative volatility and establish more grounded valuations, it suggests the adoption of a hybrid approach that combines the expertise of curators with machine learning models and standardized valuation frameworks. The analysis concludes that while NFTs provide significant opportunities for artists by increasing market access and liquidity, the current environment is fraught with legal uncertainties and economic instability. The thesis advocates for the ongoing evolution of economic and legal frameworks to fully leverage the benefits of NFTs in the art market, ensuring they contribute positively to the sustainability and growth of artists' careers and stakeholders.
Open Access
A low-cost, low-intensity contingency management smoking cessation programme with students: Experimental evidence
(2018) Rusch, Olivia; Kincaid, Harold
Tobacco consumption is a pressing global issue, leading to more than five million deaths each year. In South Africa, the smoking prevalence rate is stubbornly high, implying that a successful smoking cessation programme could have large social benefits, particularly if it targets young smokers. Contingency management interventions, which provide cash transfers conditional on biochemically-verified abstinence, have been effective in bringing about increased smoking cessation rates. However, contingency management programmes are typically very costly and involve frequent monitoring. This dissertation presents results of randomised controlled trial evaluating a low-cost, low-intensity contingency management smoking cessation programme conducted on a sample of treatment-seeking student smokers at the University of Cape Town in 2017. There is a statistically significant treatment effect, that is robust across multiple specifications, which increases the likelihood of abstinence by 13- 20%. In addition, the programme as a whole decreased the smoking intensity of non-abstainers. This study suggests, therefore, that a low-cost, low-intensity contingency management smoking cessation programme is efficacious in promoting abstinence amongst treatment-seeking students, and that it should be added to the tobacco control toolkit in South Africa.
Restricted
A Multivariate Evaluation of Mainstream and Academic Development Courses in First-year Microeconomics
(2007) Edwards, L J; Smith, L
This paper analyses the impact of the University of Cape Town's first-year microeconomics academic development course on performance in examinations. The paper makes two advances to existing empirical literature in this area. Firstly, we compare performance with a control group drawn from the mainstream economic course. Secondly, we evaluate performance in subsequent courses in first-year macroeconomics and second-year microeconomics. The results suggest that the academic development course has a major impact on students’ performance in the structured/essay questions, relative to the control group, in first- and second-year microeconomics, and for the multiple-choice questions in first-year macroeconomics. Matriculation results, mathematics, English first language, physical science and gender are also important determinants of performance.
Open Access
A policy for the (jobless) youth: the employment tax incentive
(2021) Ebrahim, Amina; Leibbrandt, Murray; Ranchhod,Vimal; Pirttilä, Jukka
The Employment Tax Incentive (ETI) is a first of its kind wage subsidy policy in South Africa. Designed to tackle the problem of youth unemployment, the ETI differs from previous policies as it aims to address unemployment through stimulating job creation. Youth unemployment has remained above 40 percent in the past ten years and is one of South Africa's key challenges. The policy was adopted in the face of this alarmingly high level of youth unemployment and at a time where the aggregate demand was low. This thesis is an important contribution to the academic literature on the demand for young workers by providing insights into this large active labour market policy intervention. The first substantive contribution is the preparation and development of a panel dataset based on payroll tax records. The tax data panel is then used to investigate the beneficiaries of the subsidy. Large firms in retail; manufacturing and financial services sectors are responsible for the highest number and largest value of subsidy claims. The subsidy is well targeted reaching younger workers in the eligible group. The subsidy is, however, only reaching half of all subsidy eligible workers. The second contribution is the investigation of job creation at the firm level. Using a matched difference-in-differences approach, a subset of ETI firms is found to have increased their employment of youth and these results are robust to various measures of youth employment. No evidence of displacement of ineligible workers if found. The third contribution explores the labour market outcomes of individuals eligible for the subsidy. Using both tax and survey data, I estimate the intention-to-treat impacts of the ETI using a triple differences method. There are very small positive effects on earnings and entry into employment and no evidence of change on overall employment and unemployment rates for young, low-wage workers. The thesis concludes by assessing the aggregate implications from these results for understanding youth unemployment in the South African labour market and the role of active labour market policy in overcoming this problem.
Open Access
A Qualitative Analysis of the South African Just Transition
(2021) Monteith, Struan; Morris, Michael
The threat of climate change has been identified as one of the leading challenges facing humanity. As such, there is a necessary global transition to lower-carbon economies and societies to reduce the harmful emissions caused by human activities to mitigate the growing climate crisis. Yet, there are fears that there will be job losses and economic hardships as the world transitions away from the carbonheavy dependence of the past. The Just Transition principle has emerged globally as a framework of ensuring these potential job losses and economic hardships are planned for, and the people inherently at risk in the transition are protected. The Just Transition is built on the acknowledgement that climate change must be averted, but it must be done so justly. In South Africa, there is a particular need for the Just Transition, based on the country's historic dependence on coal, the broad socioeconomic challenges and the country's vulnerability to climate change. This thesis explores hundreds of qualitative views from numerous stakeholders around the country on what the Just Transition will mean for South Africa. It analyses the current Mineral Energy Complex and climate change situation in South Africa, and examines the stakeholder determined vision for the country for 2050. Synthesised from views from across South Africa, this thesis furthermore established the four interrelated and stakeholder determined pathways which could facilitate the South African Just Transition – namely an Energy Transition, Restoring Land Resources, providing Safe Water for All, and utilising Green Growth.
Open Access
A review of mathematical programming models of irrigation water values
(2004) Conradie, B I; Hoag, D l
By introducing the user-pays principle into the irrigation water pricing debate, the 1998 National Water Act created a demand for models to measure willingness-to-pay for irrigation water. Water values are traditionally simulated with mathematical programming models. Models differ in their treatment of crops, irrigation options and water constraints, and other firm-level characteristics but they all use shadow prices as an indication of water value. The 17 models reviewed here, report average annual water values of between $0.0042·m-3 and $0.1899·m-3. Crops modelled influence water values, but there is no apparent relationship between objective function specification and average value. Nor does the number of irrigation options seem to influence water value either. The policy implication is that while similar models for the same region produce consistent estimates, each region requires its own model that has to be updated regularly.
Open Access
A review of mathematical programming models of irrigation water values
(2004) Conradie, B I; Hoag, D L
By introducing the user-pays principle into the irrigation water pricing debate, the 1998 National Water Act created a demand for models to measure willingness-to-pay for irrigation water. Water values are traditionally simulated with mathematical programming models. Models differ in their treatment of crops, irrigation options and water constraints, and other firm-level characteristics but they all use shadow prices as an indication of water value. The 17 models reviewed here, report average annual water values of between $0.0042·m-3 and $0.1899·m-3. Crops modelled influence water values, but there is no apparent relationship between objective function specification and average value. Nor does the number of irrigation options seem to influence water value either. The policy implication is that while similar models for the same region produce consistent estimates, each region requires its own model that has to be updated regularly.
Open Access
A small push goes a long way: An evaluation of the cumulative effects of a cash transfer on South African youth
(2021) Jani, Tafadzwa; Eyal, Katherine
Persistently high poverty rates in developing countries have negatively affected social welfare outcomes, including infant mortality, food security, life expectancy, and educational attainment. In the late 2010s, depressed household incomes endured in many developing countries in the Americas, Africa and Asia. Cash transfer programs were introduced in many low-income countries in the 1990s, often intended to reduce poverty and increase human capital. South Africa launched the child support grant (CSG) in 1998, an unconditional cash transfer for children below the age of seven. By 2017, the program boasted twelve million beneficiaries, with an upper age limit of eighteen. Globally, initial evaluations of cash transfers (including the CSG) focused on children, and the short-term impacts on education, health, and consumption. However, fewer evaluations of the impact of extended receipt have taken place, particularly using older beneficiaries who experience lifelong receipt. This thesis analyses the long-term effect of CSG receipt on youth outcomes. Observing a positive CSG effect on South African youth would be encouraging, given that 3.3 million youth were not involved in any employment, education, or training in 2018. The literature focussing on older youth outcomes and long-term receipt primarily examines educational outcomes, mainly evaluating cash transfer programs in North America. This thesis draws on the National Income Dynamics Survey, a nationally representative longitudinal study conducted in South Africa between 2008 and 2017. Both the irregular expansion pattern of the CSG, and the panel nature of the survey are utilised to estimate grant impact on two cumulative outcomes (educational achievement and physical health, measured by height), and two current outcomes (labour force participation and mental health), using a youth sample aged between fifteen and twenty-seven. Those experiencing a higher duration of CSG receipt display higher educational achievement, higher average height and lower labour force participation. However, no significant effects are found on mental health. These results suggest extended receipt of an unconditional transfer may positively impact human capital accumulation, while current outcomes are less likely to be affected (World Bank 2016).
Open Access
A stochastic model of the South African gold mines
(1991) Beelders, Owen
A stochastic model of the South African Gold mines was constructed using Contingent Claims Analysis. This method allows the modelling of the major sources of uncertainty that the gold mines face, namely, uncertainty surrounding the future gold price, the exchange rate, the inflation rate, and the interest rate. The trajectories of these variables were modelled by stochastic differential equations. By applying the principles of contingent claims analysis, we could obtain a valuation partial differential equation that described the value of the mine contingent on the current values of the state variables mentioned above. This partial differential equation was solved by the Monte Carlo method and the solution was compared to current estimates of the mines' value.
Open Access
A study of the Cape Town agreement
(1947) J.E Corbett
No abstract
Open Access
A study on the effects of peer review in knowledge production
(2023) Mwinyi, Sophia; Georg, Co-Pierre
Collaborations in research takes place formally or informally. Formally, when researchers co-author scholarly work or through an editorial peer review and informally, when researcher peer review each others work or provide feedback or comments informally. While there has been a lot of research on the formal editorial peer review process in other fields, less is known about its effects in economics knowledge production. Economic decision-makers rely on data from government agencies, private firms, and peer-reviewed and published academic research to formulate well-informed policies and decisions. Therefore, peer review process is at the core of ensuring that policies and decisions are made from accurate information, not only in economics but also in other fields. Despite its extensive use, peer review process has been subjected to a number of biases that may affect the quality of the information generated. This paper evaluates various aspects affecting the peer review process using data from 661 manuscripts submitted to ERSA between 2013 and 2018. Aspects discussed include reviewer bias, recommendation biases resulting from conflict of interest, author prominence & institutional affiliation, gender composition of the authors, duration of manuscript review and quality of the manuscripts & ERSA's editorial process.
Open Access
Acreage response before and after the deregulation of the South African maize industry : the role of SAFEX in price discovery and price risk managment
(2010) Behar, Alexander
The withdwal of the Maize Board in 1996 meant that farmers could no longer rely on their pre-planting price or "voorskat" for price discovery and price risk management. Some have claimed (UNCTAD, 2007) that the South African Futures Exchange (SAFEX) can provide these functions. We test this claim and analyse the impliacation of it.
Open Access
Addressing Plastic Bags Consumption Crises through Plastic Bag Levy, Retailer Monetary and Non-monetary Interventions in South Africa
(2022) Abiola, Babatunde; Visser, Martine
This research analyses the impact of a plastic bag levy, and retailer interventions focussing on promotion of reusable bags to reduce plastic bag consumption. For this purpose, tax revenue data for the fiscal years 2008 to 2020 and retail outlet data for March 2018 to February 2020 was used. A descriptive arc price elasticity was estimated from the tax revenue data, while the retail outlet data was analysed by using a panel fixed effects model to evaluate the impact of three treatments on plastic and reusable bag consumption in South Africa. Findings revealed that Treatments 1 (a monetary intervention based on giving reusable bags away for free) and 2 (a non-monetary intervention framed around a plastic free July campaign) significantly increased reusable bag uptake and reduced plastic bag consumption, while Treatment 3 (a monetary intervention involving a subsidy on reusable bags) increased reusable and plastic bag sales. The findings contribute to the literature on the effectiveness of non-monetary nudges (T2). The latter is more efficient than the monetary incentives (T1 and T3). The results also agree with the literature on the ineffectiveness of subsidies (T3) for the purpose of discouraging the consumption of plastic bags. The results confirmed that plastic bag consumption is habitual in South Africa. Based on these findings, policy recommendations were made that public campaigns and other behavioural nudges should be considered more effective in addressing the consumption of plastic bags than subsidies on reusable bags. In addition, because of the revealed low level of reuse of both plastic and reusable bags, the use of reminders to reuse bags should be considered and researched in order to modify consumer behaviour in South Africa.
Open Access
Addressing water scarcity in urban Tanzania: household preferences, behavioural interventions, and technological adoption
(2025) Tibanywana, Julieth Julius; Muchapondwa, Edwin; Robinson, Elizabeth
Access to safe drinking water remains a critical challenge in developing countries. As of 2022, only 31% of the population has access to safely managed drinking water, while the rest rely on basic, unimproved, or surface water sources. This issue is particularly severe in Dar es Salaam, Tanzania's most populous economic hub, where frequent droughts, outdated infrastructure, insufficient investments, rapid urbanization, and population growth exacerbate persistent water shortages. Between 2019 and 2023, water demand in Dar es Salaam increased by 16%, while daily production declined by 11.72%. The escalating water scarcity forces households to rely on unsafe sources, raising the risk of contamination. Addressing these challenges requires improved water conservation and reliable supply systems. This thesis examines water-related issues in Dar es Salaam from a household demand perspective through three studies: (i) households' preferences and willingness to pay for reliable water supply, (ii) the impact of information campaigns on water-saving behaviours, and (iii) the adoption of water-saving technologies. Each study is presented in a separate chapter. The first study (Chapter Two) examines household preferences and willingness to pay for reliable water service using a choice experiment design, incorporating attributes such as frequency, water quality, pressure, time of service, and cost. The study reveals preference heterogeneity and employs a random parameter logit model to capture this diversity. Findings indicate a preference for high-quality, drinkable tap water with good pressure, available either in the morning, afternoon, or at night. The study suggests that policy options should focus on improving tap water quality and pressure. The second study (Chapter Three) assesses the impact of an information campaign on water- saving behaviours using a randomized control trial involving 1,600 households, split equally into treatment and control groups. The treatment group received water usage reports for six months, comparing their consumption to the neighbourhood median. The difference-in- difference analysis indicates a reduction in water consumption by 7.65% (1.49 m³) during the campaign and 8.18% (1.6 m³) to 11.18% (2.30 m³) in the five months following the intervention. The study underscores the effectiveness of information campaigns in promoting water-saving behaviours and recommends their use by local authorities. The third study (Chapter Four) investigates the adoption of water-saving technologies, focusing on greywater technology. Data from 962 households are analyzed using Poisson and logit models to identify factors influencing adoption. The analysis reveals that factors such as age, education, income, social group membership, and awareness influence the adoption of water- saving technologies. Furthermore, the study uses a choice experiment to reveal preferences and willingness to pay for greywater technologies with longer lifespans, minimal contamination, and low odour, although high costs deter adoption. Marginal willingness to pay ranges from TZS 414,511.80 (US$180.22) to TZS 573,947 (US$249.54), representing 72.72% to 100.69% of the average monthly household income. The study recommends government incentives, such as subsidies and tax reductions, as well as campaigns to address misinformation and encourage technology adoption. These studies highlight critical areas for improving water access and conservation in Dar es Salaam, emphasizing the need for reliable water services, effective information campaigns, and supportive measures for adopting water-saving technologies.
Open Access
Adolescent econometricians : perceived earnings differentials and choice for tertiary education
(2008) Moyo, Alfred N F; Leibbrandt, Murray;
Includes bibliographical references (leaves 69-73).
Open Access
Adverse childhood experiences and educational outcomes, problem drinking and the perpetration of violence
(2013) Pieterse, Duncan; Nattrass, Nicoli; Wittenbetg, Martin
Violence in South Africa is very high by international standards. Many South African children experience adverse events, such as childhood maltreatment, that are a reflection of these high levels of violence. Due to a lack of data we know little about the extent, nature, causes and long-term consequences of adverse childhood experiences in South Africa. We contribute to closing this gap in the empirical literature by using the Cape Area Panel Study (which is the only representative dataset that includes a module on adverse childhood experiences for a metropolitan city in South Africa) to explore the extent and nature of adverse childhood experiences as well as the associated long-term developmental consequences. We supplement various waves of the Cape Area Panel Study with official crime statistics from the South African Police Service; demographic information from the 2001 Census; and spatial and demographic information from Cape Town. In our empirical chapters we explore the impact of childhood maltreatment and having a problem drinker in the home during childhood on the perpetration of violence, problem drinking and educational outcomes. We control for potential confounders using a range of statistical techniques (including neighbourhood fixed effects) and add several robustness checks (including household and sibling fixed effects) to evaluate the strength of our findings. Our results indicate that maltreated children suffer large adverse consequences in terms of their numeracy test scores and probability of dropout and the estimated effects of maltreatment are larger and more consistent for the most severe types of maltreatment. Children with a parent who is a problem drinker during childhood suffer adverse consequences in terms of childhood maltreatment and are at increased risk of problem drinking and the perpetration of assault against strangers later in life. Once we control for having a problem drinker in the home during childhood and binge drinking during adulthood, there is no evidence to support the cycle of violence hypothesis. Having problem drinker in the home during childhood doubles the probability of assaulting a stranger for black and coloured young adults. The strength of the effect of having a problem drinker in the home during childhood suggests the need for a more nuanced understanding of the childhood origins of violent behaviour in an environment where the prevalence of alcohol abuse is high.

Browsing by Department "School of Economics"

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