Browsing by Subject "Economics"
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- ItemOpen AccessA low-cost, low-intensity contingency management smoking cessation programme with students: Experimental evidence(2018) Rusch, Olivia; Kincaid, HaroldTobacco 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.
- ItemOpen AccessA policy for the (jobless) youth: the employment tax incentive(2021) Ebrahim, Amina; Leibbrandt, Murray; Ranchhod,Vimal; Pirttilä, JukkaThe 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.
- ItemOpen AccessA Qualitative Analysis of the South African Just Transition(2021) Monteith, Struan; Morris, MichaelThe 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.
- ItemOpen AccessA socio-economic study of an African development scheme(1969) Reynolds, Norman; Wilson, Francis
- ItemOpen AccessAddressing Plastic Bags Consumption Crises through Plastic Bag Levy, Retailer Monetary and Non-monetary Interventions in South Africa(2022) Abiola, Babatunde; Visser, MartineThis 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.
- ItemOpen AccessAfrican labour problems on South African gold mines, with special reference to the strike of 1946(1969) Diamond, Charles Robin; Robertson, H MThe aim of this work has been to place the African Mine Strike of 1946 in historical perspective, by tracing through the years the results of the policy of the gold mining industry and the paternalism of the Government, and thus the causes of the strike. My task was aggravated by the fact that many of the principles in this story were either not in the country or could not see me. In addition, records of some particularly important court cases, as well as the files of such organisations as the Communist Party, have been destroyed.
- ItemOpen AccessAggregation bias, trade liberalisation and the J-curve in South Africa : exploring the bilateral real exchange rate - trade balance relationship(2007) Trappler, DanielThis paper investigates the short and long-run effects of openness on South Africa's non-gold merchandise trade balance at the bilateral and aggregate level. Openness is measured using bilateral real exchange rates and a measure of tariff protection, namely collection rates. Bilateral trade balance relationships are estimated for seven countries (France, Germany, Italy, Japan, the Netherlands. the UK and the USA) to test for heterogeneous responses in the relationship. The robustness of the results are assessed USl11g the Autoregressive Distributed Lag (ARDL) Approach to co-integration. We find strong evidence of aggregation bias. In all cases a real exchange rate depreciation improves the bilateral (and aggregate) trade balance, but the strength of the relationship differs across regions. We find evidence of J-curve behaviour in the cases of South African bilateral trade with the UK and the USA. Similar behaviour is not found using aggregate level data. Protection is shown to improve the trade balance in some cases, but not others.
- ItemOpen AccessAll jobs are equal, but some jobs are more equal than others: what a clustering algorithm reveals about the labour market segmentation in South Africa(2021) Kensett, Jonathan Matthew; Ranchhod, Vimal; Leibbrandt, MurrayThe theory of labour market segmentation is often used to explain wage inequality in South Africa. It posits that labour markets consist of different segments that are differentiated from other segments based on some observable characteristics. Limited mobility between these segments prevents wages from equalising. In this paper, I make use of a clustering algorithm to identify these informal and formal segments in the labour market. I apply this methodology to a nationally representative panel dataset of employed South Africans. I find that employed South Africans fall into one of three segments. Two of these segments resemble what is commonly referred to as formal and informal employment. The third segment lies somewhere between these two segments and is referred to as semiformal employment. Findings suggest that informally and semiformally employed individuals have s relatively lower chance of entering formal employment. Those in formal employment are much more likely to remain formally employed. It also appears that much of the churning observed in the labour market is between semiformal and informal employment, rather than between informal and formal employment. The identification of this group of semiformally employed labour market participants helps contributes to a more nuanced understanding of labour market dynamics in South Africa and highlights the value that data driven methodologies can provide to applied labour economic analysis.
- ItemOpen AccessAltruism and the role of affect: an investigation into the causal effects of positive emotions and its rationality on altruism(2021) Kinyanjui, George Kariuki; Keswell, MalcolmThere is now well established evidence that shows that growing up in poor neighbourhoods can keep people locked in poverty. One response to neighbourhood distress – i.e., situations in which neighbourhoods serves as poverty traps – is to move people out of such situations. Experiments conducted in the United States of America (for example, the Moving to Opportunity experiment) provides a compelling case for this approach. However, when the scale of neighbourhood distress reaches a majority of the population, as is does in South Africa, where the legacy of Apartheid spatial inequality persists, alternative approaches are necessary. One such alternative is to seek to better understand the behavioural mechanisms at work that tilt communities toward the low level equilibria characterising a poverty trap and to target those behaviours that can aggregate to produce neighbourhood distress. Behaviour modification programmes attempt to do this, for example, by targeting the underlying drivers of crime, violence, risky sexual behaviour and fatalism that characterises so many marginalised communities in South Africa. This dissertation uses data from a rare lab-in-the-field experiment to investigate one important mechanism of behaviour modification: the impact of emotions on pro-social preferences. The results show that positive emotions causes an increase in individual altruism and do not imply irrationality according to standard axiomatic frameworks in economics. This contrasts with the view of earlier investigators that emotions are disruptive in decision making. This dissertation is divided into five chapters. Chapter one focuses on a general introduction of endogenous preferences, the link between emotions, pro-social preferences and decision making. In chapter two I discuss the novel behaviour modification experiment that this dissertation is based on: the Activate! Change Driver's programme (hereafter, simply referred to as Activate!), an empowerment programme aimed at youth that live in distressed neighbourhoods in South Africa. Activate! consists of a nexus of interventions that aims to promote prosocial preferences (i.e., preferences for altruism, trust, and commitment to the public good), as well as interventions that are aimed at changing mindsets and perceptions that foster destructive risk-taking, myopia and civic apathy. The programme runs as a series of three modularised workshops covering self-belief, goal-orientation, creative thinking, problem solving, resilience, communication skills, trust building, project management, and political engagement. These interventions are theorised to lead to an actualisation of greater pro-social preferences as well as better outcomes in terms of risk taking, tolerance for delayed gratification, civic engagement, and economic opportunity. In chapter three, I investigate the causal effect of positive affect on altruism. I employed two estimation strategies where in the first strategy, I used an instrumental variable approach to estimate the effects of affect on altruism. In the second strategy, I relaxed the assumption that affect does not directly impact altruism by using a mood inducement experiment to vary affect within the subjects. Both identification strategies support the same conclusion: positive affect is shown to be a significant and positive cause of altruism. Subjects in the positive affect treatment send significantly more tokens to anonymous others in a dictator game as compared to subjects in the mild neutral affect treatment. This result is robust in all specifications considered. Chapter four focuses on characterising whether emotions disrupt rational choices in altruism. In psychology, emotions are theorised to influence decision making since they influence a person's decision to exert effort and be productive at work. There is also evidence indicating that emotions reduce time preferences over money, that they can increase cognitive flexibility, reduce spending and willingness to pay as well as increase reciprocity in gift exchange. I made use of data from a modified dictator game experiment and employed the axioms of revealed preferences to test for economic rationality. I found that subjects treated to positive affect elicited altruistic preferences that are indifferent to subjects treated to neutral affect and that their preferences fit the standard economic definition of rationality. Thus, by this account even though emotions are seen to be disruptive, they do not imply irrationality. In summary, the dissertation presents a number of implications. First, behaviour modification programmes especially in the context of marginalised communities may result in increasing pro-social outcomes and therefore have the potential to reverse fatalistic preferences among young people. Second, behaviour modification and ultimately belief updating towards pro-social preferences has the potential to spark civic mindedness among young people. Third, positive emotions mediate pro-sociality and do not blur individual rationality in decision making.
- ItemOpen AccessAmbiguity, ambiguity aversion and the coverage of uncertain risks : the case of the insurer(2011) Chelwa, Grieve; Pellicer, MiquelAmbiguity aversion is defined as an aversion to any mean-preserving spread in the probability space. Using the Smooth Ambiguity Model proposed by Klibanoff, Marinacci and Mukerji (2005), we show that ambiguity aversion results in a reduction in the proportion of insurance coverage offered by an insurer. This is because an ambiguity averse insurer calculates expected utilities by using a 'distorted' probability that raises the marginal disutility of wealth in the loss state. We also show that, in general, an ambiguity averse insurer will not offer more coverage to wealthier agents. Wealthier agents enjoy more coverage when the subjective average probability of loss is significantly high. Our results go a long way in reconciling theoretical models of insurance under ambiguity with the empirical finding that insurers are sensitive to ambiguity.
- ItemOpen AccessAn analysis of cigarette prices and affordability in Africa: evidence from African Cigarette Prices (ACP) Data(2018) Chinembiri, Tapiwa; van Walbeek, CornéCigarette affordability is defined as the amount of money or its time equivalent required to purchase cigarettes. It is one of the important determinants of tobacco consumption and is calculated from the interaction of consumer income and cigarette price. Governments of Low- and Middle-Income Countries have generally underutilized the most powerful tool in tobacco control, namely decreasing tobacco affordability by increasing tobacco taxes. I analyze price data collected from retail outlets and street vendors in seven countries: Botswana, Lesotho, Mauritius, Namibia, South Africa, Swaziland, and Zimbabwe. I use the African Cigarette Prices dataset [n=9285], which has data collected in June and July 2016. Affordability is expressed as Relative Income Price (RIP), i.e., as a percentage of per capita GDP for all countries. For South Africa, affordability is also estimated separately using household per capita income by sub-national region. The results of the study show that cigarettes are more affordable in countries and provinces where incomes are high. I compare the differences in prices between cigarette brands, packaging, and outlet type across countries, and, in South Africa's case, across provinces. The study is relevant as it indicates that, when setting excise taxes, policy makers should also take cigarette prices and incomes into account.
- ItemOpen AccessAn Analysis of the Potential Fiscal and Health Benefits of the Legalisation of the Sale of Marijuana in South Africa(2021) Settas, Andrea; Pillay, NeryviaThis paper explores the potential fiscal and health benefits South Africa could achieve if it were to legalise the sale of marijuana exploring outcomes from other countries' experiences. The fiscal benefits explored were the potential creation of a new stream of tax revenue and the decrease in government spending currently focused on anti-marijuana law enforcement. The fiscal concerns explored were issues around a decrease in tax revenue from a decline in demand as the price increases, the existence of the black market even after legalisation, and a decline in tax revenue from the decrease in alcohol consumption. The health benefits discussed are the decline in consumption of alcohol, the use of marijuana to aid in rehabilitation for alcoholics and drug addicts and the potential for a new field of research. The health concerns explored are abuse from adolescents, possibility of addiction in adults, and concerns regarding an increase in the consumption of junk foods. The marijuana market already exists in South Africa, in both rural and non-rural areas and as such, both poorer and more developed communities could gain from the legalisation of marijuana in South Africa. Data was collected through surveys to understand consumer preferences for marijuana, there is strong evidence that respondents are consuming marijuana already and as such there is evidence of the existence of a marijuana market within the sample population that is not being taxed, therefore, government could gain from legalising the sale of marijuana as they could earn a tax revenue from it.
- ItemOpen AccessAn application of the augmented Solow model to measure the impact of military spending on economic growth in Uganda for the period 1962-2018.(2021) Abura, Elijah; Nikolaidou, EfiThis paper provides a case study of the impact of military spending on economic growth in Uganda using an exogenous dynamic growth model and time-series data over the period 1962-2018. This is achieved by estimating and appraising a sample inclusive of periods not covered in previous studies that resulted in structural changes to the Ugandan economy such as conflict and currency devaluations. The results indicate that there is a significant negative effect of a military burden on growth in the long run and short-run when aid is not included as an explanatory variable. Foreign aid increases the magnitude of the regression coefficients however there is no evidence that aid increases the military burden. Overall, the ARDL approach to cointegration supports the data and is effective at providing empirical proof to seemingly axiomatic statements on the military spending and growth relationship.
- ItemOpen AccessAn Examination of the Accuracy of Economic Country Forecasts produced by the Economist Intelligence Unit (EIU)(2018) Falconer, Nick; Van Walbeek, CornelisThis paper investigates the accuracy of Country-Level Forecasts for six variables: Real GDP Growth, Inflation (Consumer Price Index), Short-Term Interbank Rate, Budget Deficit (as % of GDP), Current Account Balance (as % of GDP) and the Unemployment rate. The data used in this analysis is produced by the Economist Intelligence Unit (EIU) and covers the period 1996-2013. The two forecast horizons of primary interest are Current-Year (t) and One-Year-Ahead (t+1) forecasts. A range of statistical methods are used to ascertain the accuracy of the EIU forecasts in 103 countries for most of the variables, while the accuracy of the Unemployment rate forecasts used data for 68 countries. Generally, the results confirm this paper’s four primary hypotheses: (1) EIU forecasts are more accurate than No-Change-Forecasts; (2) EIU forecasts for higher income countries have smaller errors than forecasts for lower income countries; (3) The accuracy of EIU forecasts decreases as forecast horizon increases; and (4) The accuracy of EIU forecasts was relatively weaker during the period of the Global Financial Crisis (2008-2009) than in other periods.
- ItemOpen AccessAnalysing Risk Preferences and Time Preferences with respect to Smoking Status and Smoking Intensity(2019) Preston, Charles; Hofmeyr, Andre; Kincaid, HaroldSmoking 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.
- ItemOpen AccessAn analysis of capital-output ratios with special reference to South Africa(1972) Tosti, DavidThe purpose of this work is an analysis of the capital-output ratio in South Africa during the period 1950-1969. I will attempt to describe, on the basis of theoretical considerations, the trends in and the causes of movements of this ratio. I will attempt to relate theory (Part I and Part II) and reality (Part II). Part III will be devoted to prognostications and a comparison of foreseen data with those of the fourth E.D.P.
- ItemOpen AccessAnalysis of hedge funds' performance in South Africa(2013) Cephas, Dube; Abraham, HaimIncludes abstract. Includes bibliographical references.
- ItemOpen AccessAnalysis of households? modern energy deprivations beyond connections and access in the Northwest zone of Nigeria(2023) Aboagye, Solomon; Muchapondwa, EdwinAccess to modern energy is considered indispensable to the pursuit of economic growth and poverty alleviation. It also provides crucial support for the achievement of many sustainable development goals. Yet, Nigeria, the largest economy in Africa, has one of the lowest rates of net electricity generation per capita worldwide; with about 44% of its population lacking access to electricity. A remarkable 94% also lack access to any clean cooking technology despite the welldocument benefits of modern cooking solutions. The condition is worse in the Northwest zone of the country, the study area, as it hosts a substantial share of the country's population without access to electricity and modern cooking solutions. The above situation raises, at least, three research problems. Firstly, how does the current state of access to electricity impact on the profits of households' non-farm enterprise beyond connections to the national grid? Secondly, to what extent does an improvement in the attributes of modern cooking solution influence households' health outcomes against the backdrop of widespread use of biomass for cooking? Thirdly, can subsidies and credit regimes be effectively deployed to stimulate large-scale uptake of improved cookstoves? Consequently, chapter 2 evaluates the causal impact of access to electricity on the profits of households' non-farm enterprises as a latent poverty reduction pathway. Applying the generalized propensity score and inverse probability weighting of treatment methods of matching and estimation, the study found that on the basis of connections, access to electricity has limited positive causal effect on the profits of household's non-farm enterprises. However, moving beyond connections only and focusing on the attributes of electricity (i.e., the characteristics of the electricity services from the perspective of end-users which include electricity availability, reliability, affordability, quality as well as the capacity of the grid of electricity) among actual users of electricity the study established a strong positive causal impact of access to electricity on profits. Further analysis shows that in most instances, this impact however tends to be principally dependent on whether the enterprise is more profitable or otherwise. Chapter 3 assesses the attribute dimension of cooking-health nexus. Utilizing the probit and Heckman models respectively to the cough and health expenditure per capita specifications it is observed that when attributes such as exposure and safety of primary cookstove are improved, they tend to be important catalyst to reducing both cough incidence and total health expenditure per capita of the household. This important evidence could not have been learnt if the attribute dimension of the debate had not been evaluated. Ultimately, improvement in household's overall access to modern cooking solution is also associated with reduction in both cough incidence and total health expenditure per capita especially for households in higher tiers of access. Thus, a move towards clean cookstoves such as LPG/natural gas stoves, electric stoves while ensuring that households attain higher attribute tiers of modern cooking solutions could be expected to generate significant improvement in household's overall health. Chapter 4 examines the effectiveness of one-off subsidy and credit regimes in driving households' willingness to pay (WTP) for improved cookstoves (ICS). Using a heteroscedastic-corrected probit models, the results show that allowing households to pay over time coupled with a one-off subsidy of no less than 34% significantly increases the mean WTP to the extent that households are willing to pay even more than the subsidized price. Given that the regime mean WTP values are higher than the effective price of subsidized ICS, both WTP incentives are not likely to damage future pricing when ICS are eventually circulated through pure market mechanisms. Furthermore, we observe the underlying mean WTP to decline after 12 months. This suggests that a 12-month payment instalment could be the maximum effective credit duration required to drive adoption. Additionally, we observe that income, access to grid electricity, access to credit, financial inclusion are critical stimulants of WTP towards ICS.
- ItemOpen AccessAn analysis of the capital account in South Africa's balance of payments, 1960 - 1977(1978) Kahn, Saul Brian; Kantor, BrianRecent developments in the capital account of South Africa's balance of payments have giyen cause for concern about the capital account and the appropriate policies that should be implemented to protect the level of South Africa's foreign exchange reserves. These developments have contributed to the appointment of a Commission of Inquiry into the Monetary System and monetary policy in South Africa, and an interim report on exchange rate policies is expected in November, 1978. This study, which was inspired by the lively debate on this issue, is an attempt to analyse the general trends in the capital account particularly those related to the supply of foreign capital, the exchange control policies of the authorities to protect the capital account from sudden adverse fluctuations, and the determinants of flows of foreign capital.
- ItemOpen AccessAn analysis of the dynamic multiplier in a two-region economy(1992) Tsai, Ying-YiIn the literature on regional economics various models have been developed to study the causes of economic growth and income fluctuations within a region. One of the best known models is that of the export base. The validity and general applicability of this model was first emphasised by North (1955), though Tiebout (1956) subsequently refuted it by claiming that factors other than exports may have a strong effect on the growth of a region. These factors included private investment, government expenditure and productivity increases amongst local industries. The North-Tiebout debate focuses essentially on the difference between the long-run and the short-run sources of regional economic growth. The North-Tiebout debate was followed by two main approaches: one based on the Keynesian income-expenditure approach and the other on input-output analysis. This essay is concerned with the application of the Keynesian approach within the context of a two-region economy. Section 2 provides a review of the literature on the export base and Keynesian approaches. This is followed, in section 3, by a discussion of Hartman and Seckler's application of dynamic analysis to the regional economy. Section 4 then shows how the Keynesian model can be adapted and applied to a two- region dynamic framework. Finally, in section 5, the stability conditions of the Keynesian model are examined, while final conclusions are drawn in section 6.