58 research outputs found
South African economic issues
No full textLecture series coordinated by Associate Professor Corne van Walbeek, Head of School of Economics, University of Cape Town. This series of audio lectures will be of interest to those who wish to learn more about the current economic climate of South Africa
Impact of the Sectoral Determination for Farm Workers on the South African Sugar Industry: Case Study of the KwaZulu-Natal North and South Coasts
No full textA survey of 103 sugarcane farmers on the KwaZulu-Natal coast was conducted in order to analyse the impact of the Sectoral Determination for Farm Workers (2002) on South African agriculture. The sample was separated into a high wage paying North Coast and lower wage paying South Coast. Typically farmers were unable to distinguish between the impact of the Sectoral Determination and other labour laws. Results indicate that the impact of the legislation is similar in each region. No respondents reported mass retrenchment, but job shedding is disguised by not replacing workers (especially unskilled workers) that leave the farm. A sizeable number of growers (17 per cent on the South Coast and 44 per cent on the North Coast) have reduced the working week to 27 hours (or 36 hours in the Felixton Mill Group Area) enabling them to pay wages on an hourly, rather than a weekly basis. This strategy reduces the effective wage. About 40 per cent of growers have reduced the in-kind benefits to their workers. About half of respondents indicated that they are likely to increase their use of seasonal and contract labour in future. Although a majority of respondents indicated that they considered mechanisation of the harvesting process, cost and topographical factors currently does not make this a serious alternative to manual harvesting. However, because of increased wage costs and the relatively strong currency in recent years, chemical weed control has become an attractive alternative to manual weed control.Crop Production/Industries, Labor and Human Capital,
The economics of tobacco control in low- and middle-income countries
No full textIncludes bibliographical references (p. 174-189).Global best practice in tobacco control policy is anchored by the Framework Convention on Tobacco Control which recommends that countries use, amongst other things, tax increases and advertising bans to reduce tobacco consumption. Furthermore, this is supplemented by various policy documents and technical manuals produced by the World Health Organisation and the World Bank which provide a more thorough justification of these policy measures. This thesis seeks to examine the application of these tobacco control policy measures on tobacco consumption in low and middle-income countries. The thesis focuses on tax policy in low- and middle-income countries by moving the metric from price to affordability (which considers price and income simultaneously). This is important since many low- and middle-income countries are growing rapidly and price increases may not be reducing consumption
Socioeconomics of tobacco use in the Southern African Customs Union
No full textIncludes bibliographical references.Tobacco consumption has long been a significant health concern. This is because it is one of the significant causes of premature death, as a result of various types of diseases that arise due to the use of both smoking and smokeless tobacco. Tobacco use has been found to be associated significantly with socioeconomic status, and particularly, tobacco use has been found to be higher amongst individuals with lower socioeconomic status. This paper studies the relationship between socioeconomic factors and tobacco consumption for men and women from countries in the Southern African Customs Union, using data from the Demographic and Health Surveys for Namibia, Lesotho and Swaziland; and the National Income Dynamics Study for South Africa. This paper finds that among both men and women, cigarette use is higher in urban areas, while the use of chewing tobacco, snuff, and pipes is generally higher in rural areas. Also, this paper finds that tobacco use is generally lower the higher the educational attainment, while the prevalence of tobacco use is found to be higher in the older age groups compared to the younger age groups
Waterpipe tobacco smoking among university students in the Western Cape Province of South Africa : differences and similarities to cigarette smoking
No full textIncludes bibliographical references.The aim of this study was to determine the prevalence rates of current and ever waterpipe use and investigate the associated correlates, paying particular attention to the perceptions and beliefs about waterpipe’s adverse health effects as well as its social acceptability. In addition the study aimed to compare the results with the prevalence rates of current and ever cigarette use among the same study group. An online, anonymous, cross-sectional survey was administered via email to all students at the four universities within the Western Cape Province of South Africa during September 2013. 4578 students completed the survey (4.3% response rate). 10.6% [n= 484] of the sample were current waterpipe users while 67.1% [n= 3101] were ever users of waterpipe. 61.1% of current smokers smoked waterpipe to socialise with less than 1% of smokers smoking alone. The majority of waterpipe smokers thought waterpipe use was less harmful, less addictive and more accessible than cigarette smoking. 96.1% [n= 465] of current users felt waterpipe was socially acceptable compared to only 69.9% [n= 1862] of non-smokers. Factors significantly associated with increased odds of being a current smoker were: Coloured race, increased quantity of alcoholic drinks drunk per drinking day, increased frequency of binge drinking and the perception that waterpipe was not difficult to quit. Alcohol consumption patterns apart from problem drinking were associated with waterpipe use. More than half of current waterpipe smokers were not current cigarette smokers [n= 273/484]. Waterpipe smoking is more socially acceptable and therefore more widespread among students in all faculties, genders, ages, physical activity levels and economic brackets than cigarette smoking. This is likely a result of the lack of knowledge about the health risks of waterpipe, the taste of the flavoured sweetened tobacco, and the perception that waterpipe is socially acceptable. While there is overlap between current cigarette and waterpipe users, waterpipe users are distinct from cigarette users. Therefore policy aimed at cessation needs to be targeted towards all students, using a two-pronged approach focusing on the knowledge and beliefs of students and the legislative aspect of waterpipe tobacco
The economics of tobacco control in some African countries
No full textIncludes bibliographical referencesThis thesis examines some aspects of the economics of tobacco control in South Africa, Uganda and Zambia. The first part of the thesis examines whether tobacco expenditure displaces (or "crowds out") expenditure on other goods and services within Zambian households. In so doing, I make two contributions to the literature. Firstly, I use expenditure data from a low-income sub-Saharan African country where most households are poor. Secondly, I use the standard instrumental variable used in the literature, the adult sex ratio, to instrument for the tobacco smoking status of Zambian households. But unlike previous studies, I relax the strict exclusion restriction and allow for the adult sex ratio to be correlated with the error term. That is, I allow the instrumental variable to be imperfect. I consider the relaxation of the exclusion restriction to be reasonable given that the adult sex ratio is just as likely to influence tobacco expenditure as it is to influence expenditure on other goods and services. Even after relaxing the exclusion restriction, I, however, confirm many findings in the literature. For instance, I find that smoking households allocate less expenditure towards food, schooling, clothing, water, electricity, transportation, equipment maintenance and remittances. In addition, the crowding out patterns I uncover are in some ways related to the geographical location of households which in turn is related to socioeconomic status in Zambia. In sum, the results in this part of the thesis show that a broader accounting of tobacco's costs in Zambia should include other costs over and above mortality and morbidity considerations. We know from several studies that tax and price measures are the single most effective policy tool for reducing tobacco consumption. However, most of this evidence is based on studies conducted in developed countries with very few published studies on African countries. The second part of my thesis, therefore, contributes to the recent literature that uses expenditure data to estimate price and expenditure elasticities of demand for tobacco products in Low-and Middle-Income countries. I use expenditure data from Uganda and exploit the fact that prices of cigarettes vary across geographical space. I also adjust my demand elasticity estimates for measurement error and quality heterogeneity. I find price and expenditure elasticities that are in line with international evidence. For instance, I find that cigarette demand is expected to decline by between 3% and 4%, at the very least, for every 10% increase in cigarette prices. The authorities in Uganda ca n, therefore, reduce cigarette consumption by increasing excise taxes on cigarettes without reducing tax revenues. The third and final part of my thesis evaluates the impact on per capita cigarette consumption of South Africa's consistent excise tax increases that began in 1994. The tax rises have overtime translated into large increases in the inflation-adjusted price of cigarettes. For instance, the average real price per pack increased by 110% between 1994 and 2004. The main challenge in conducting pol icy evaluations is that of creating a credible counterfactual. That is, we want to know what would have happened to per capita cigarette consumption in South Africa if the excise tax increases had not occurred. This is particularly important in the case of South Africa because per capita cigarette consumption had already started declining by the time the tax rises started. I, therefore, use a transparent and data-driven technique, the Synthetic Control method, to create a credible counterfactual of South Africa's cigarette consumption after 1994. The counterfactual is constructed as a linear combination of the per capita cigarette consumption of countries that are similar to South Africa but did not engage in large-scale tobacco control efforts over the peri od 1994 to 2004. I find that per capita cigarette consumption would not have continued declining in the absence of the consistent tax rises that began in 1994. Specifically, I find that by 2004, per capita cigarette consumption was 36% lower than it would have been had the tax increases not occurred. This result is robust to several falsification (or placebo) exercises. Based on these results, I conclude that countries in Africa can achieve substantial reductions in cigarette consumption and prevent uptake from new smokers by consistently increasing excise taxes in the manner of South Africa
The impact of cigarette excise tax Increases and harmonisation in the East African community
No full textIncludes abstract.Includes bibliographical references.This paper proposes a model that can be used to predict the likely impacts of tobacco tax increases and harmonisation in the East African Community. The model has five sections, one for each EAC country. These sections consider different cigarette market segments based on tax or price differentials. The model can therefore calculate the likely effects of excise tax increases and harmonisation on the retail selling price of cigarettes, cigarette consumption, government revenue and industry revenue for each individual country and for the EAC as a whole
Sugar-sweetened beverages in Nigeria: Affordability and expenditure and price elasticities
No full textThis research examines how consumers in Nigeria respond to income and price changes of carbonated soft drinks (CSDs). I first analysed the trend in CSD and fruit juice affordability between 2005 and 2018. I subsequently estimated the own-price, cross-price and income elasticities of sugar, CSDs, chocolate drinks, milk and sachet water for Nigeria in 2013, 2016 and a pooled sample. I used the relative income price to examine CSD and fruit juice affordability over time in Nigeria for both off-trade and on-trade consumption. For estimating the own-price, cross-price and expenditure elasticities, I used the Nigeria Household Survey, Panel (2013 and 2016) data, using the Almost Ideal Demand System. I applied Deaton's unit value model and used unit values as prices and used the Heckman procedure to correct for selection bias. For CSDs, the own-price elasticities ranged from - 0.8 to -1.8. All income (approximated by household expenditure) elasticities were positive implying all the commodities are normal goods. The income elasticity of demand lies at approximately 0.4 for CSDs. The results suggest that Nigeria can curb the consumption of excess sugar, in particular excess sugar in CSDs, by raising the price by implementing an excise tax on the sugar content in CSDs. Future research should estimate the health gains and government revenue that can be generated from such a tax. Such estimates are crucial to motivate for a sugar tax
Effect of increased reliance on specific excise on the consumption of cigarettes
No full textResearch has shown that specific tax is more effective in discouraging the behavior of smoking than ad valorem tax. This paper makes use of panel data on 39 countries to investigate the impact of increased reliance on specific tax on cigarette consumption. The data used includes 21 countries, from six WHO regions, that increased their reliance on specific tax between 2008 and 2016. The fixed effects and random effects models are employed to estimate the extent to which a change in the specific share of excise tax changes the per capita consumption of cigarettes. According to the results, a one percent increase in the share of specific tax is associated with a 0.16 percent decline in per capita consumption. The findings support the assertion that increased reliance on specific tax results in a more significant decline cigarette consumption. The paper recommends that policymakers should aim to implement a health-driven taxation policy which entails a heavy reliance on specific tax on cigarettes and other tobacco products. However, it is essential to keep in mind that reliance on specific tax may only be useful when adopted with along with other strategies of tobacco control such as combating illicit trade
Up in Smoke? Assessing the Economic Case for Investing In, or Divesting From, Tobacco Companies
No full textConsidering that wealth-maximising investors are generally not willing to sacrifice financial returns in favour of ethical considerations, this paper seeks to investigate the economic case for investing in, or divesting from, tobacco companies. After analysing the financial performance of some of the world's largest tobacco companies, this paper finds that the demand for traditional tobacco products (e.g., cigarettes) is in decline due to tightening tobacco regulation and increasing health awareness, and as a consequence all but one of the companies analysed experienced declines in tobacco sales (in dollar terms) over the period FY2014- FY2020. In addition, the results show that the tobacco companies in question are becoming increasingly inefficient at generating profits, and that market sentiment towards these companies' growth potential has diminished. Putting aside the possibility of tobacco companies entering the cannabis market, the evidence suggests that the future profitability of these companies depends on whether they will be able to increase the sales of Next Generation Products (“NGPs”) to significantly offset the decline of traditional tobacco sales, which they have not yet been able to do. Regulation could also dramatically affect the future success of NGPs. Given that financial markets tend to reward the stock prices of fast-growing firms, and given tobacco companies' disappointing revenue growth, the economic case for investing in tobacco companies is currently characterised by (significantly more) uncertainty and risk. In other words, it is increasingly unclear whether tobacco companies will be able to achieve growth in future; as a result, their shareholders could incur capital losses
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