Scielo RSS <![CDATA[South African Journal of Economic and Management Sciences ]]> vol. 19 num. 2 lang. es <![CDATA[SciELO Logo]]> <![CDATA[<b>The income and price elasticity of demand for housing in Ghana: Empirical evidence from household level data</b>]]> Housing is a challenging issue in Ghana, due to the rising demand and sluggish supply which has led to a deficit of more than two million housing units. This study aimed to estimate and analyse the determinants of the demand for housing in Ghana. The estimated elasticities show that owner and rental demand for housing is price and income inelastic. Permanent income elasticities were greater in each case than current income elasticity. The quantile regression showed that permanent income, current income and price were significant for all quantiles of housing units consumed. It is recommended that all these factors be taken into account when addressing the housing supply challenges facing Ghana to help clear the existing deficit and to provide for the anticipated increase in demand due to increasing income, since demand for housing in the country is income inelastic. <![CDATA[<b>"I would rather have a decent job": Potential barriers preventing street-waste pickers from improving their socio-economic conditions</b>]]> As a result of the high levels of unemployment in South Africa, many unskilled people are forced to resort to a variety of income-generating activities in the informal economy. The activity of collecting and selling recyclables presents virtually no barriers to entry, making it a viable option. Very little research focusing on street-waste pickers has been undertaken, and, when it has been conducted, it has mostly taken the form of case studies. This paper reports the results of the first countrywide research into the potential barriers that prevent street-waste pickers from improving their socio-economic circumstances. The study used a mixed-method approach. Structured interviews were conducted between April 2011 and June 2012 with 914 street-waste pickers and 69 buy-back centres in 13 major cities across all nine provinces in South Africa. Low levels of schooling, limited language proficiency, uncertain and low levels of income, as well as limited access to basic social needs make it difficult for waste pickers to move upwards in the hierarchy of the informal economy. The unique set of socio-economic circumstances in which street-waste pickers operate in the various cities and towns in South Africa make the design of any possible policy interventions a complex one. Policymakers will have to take note of the interdependence of the barriers identified in this research. Failing to do so may cause policies that are aimed at supporting street-waste pickers to achieve the exact opposite, and, ironically, deprive these pickers of their livelihood. <![CDATA[<b> A proposed quantitative credit-rating methodology for South African provincial departments</b>]]> The development of subnational credit-rating methodologies affords benefits for subnationals, the sovereign and its citizens. Trusted credit ratings facilitate access to financial markets and above-average ratings allow for the negotiation of better collateral and guarantee agreements, as well as for funding of, for example, infrastructure projects at superior (lower) interest rates. This paper develops the quantitative section of a credit-rating methodology for South African subnationals. The unique characteristics of South African data, their assembly, and the selection of dependent and independent variables for the linear-regression model chosen, are discussed. The methodology is then applied to the provincial Department of Health using linear regression modelling. <![CDATA[<b>An exploration of the online investor relations (IR) practices of companies listed on the Johannesburg Stock Exchange (JSE)</b>]]> Prior research has found that having better investor relations (IR) practices contributes towards improved share prices, liquidity of shares and analyst following. The main aim of this study was to determine the extent to which JSE-listed companies comply with international best practice guidelines for IR practices via the company's website. A secondary objective was to arrive at an opinion regarding the stage of internet adoption for IR practices in which JSE-listed companies find themselves, based on Hedlin's (1999) three-stage model. A checklist of 201 items was used to assess the websites of 205 JSE-listed companies from the beginning of July to mid-September 2012. The average online IR score for all 205 companies was found to be disappointing, although the top 100 companies in South Africa performed better than companies in other emerging and developing economies, but worse than companies in advanced economies, where size is probably the main differentiator. Bandwidth is also a constraining factor for online IR quality in South Africa. We conclude that instead of moving towards stage III (HTML, video and audio) of Hedlin's model (1999), JSE-listed companies still seem to find themselves in stage II (paper-equivalent PDF's). This should concern Chief Financial Officers (CFOs), as effective and efficient communication with investors could contribute towards attaining optimal share prices and improved liquidity and analyst following. <![CDATA[<b>The expected well-being of urban refugees and asylum-seekers in Johannesburg</b>]]> The influx of asylum-seekers and refugees from across Africa into democratic South Africa has increased significantly. The aim of this paper is to determine the factors that influences the expect well-being of this unique group. Expected well-being is an important determinant of both the decision to migrate and the choice of a country of destination. Knowledge about this determinant therefore informs refugee policies. The results show that only a few of the factors found in the literature explaining the expected well-being of voluntary migrants also explain the expected well-being of forced migrants. However, a number of factors found in the literature that explain the subjective well-being and well-being in general of refugees and asylum-seekers also went towards explaining the expected well-being of this group. These factors include: government assistance, culture, the time spent in South Africa, economic factors, crime, refugee status, reasons for leaving the home countries and the number of people staying in a house in the receiving country. The findings of this study emphasise the differences between forced and voluntary migrants and highlight the factors that influence the expected well-being of forced migrants. These in turn shed light on migration decisions and the choice of destination countries. <![CDATA[<b>Can South Africa sustain and diversify its exports?</b>]]> The aim of this paper is to examine the diversification of South Africa's exports over the period 1994 to 2012. A decomposition of export growth shows that exports of non-fuel primary commodities as well as medium-skill and technology-intensive manufactured products increased. The largest decrease was in the export of resource-intensive manufactures. These changes reflect South Africa's endowment of relatively low levels of physical and human capital. The analysis shows that export products that are further from the country's comparative advantage, make smaller contributions to growth in the intensive margin. It clearly shows the challenge of sustainably diversifying the export basket. <![CDATA[<b>Unfulfilled loan demand among Agro SMEs in Namibia</b>]]> Using a qualitative methodology approach, a case study research design by way of in-depth semi-structured interview(s) was followed to interview farmers, commercial banks, development banks, venture capitals and private equities to determine the financing options available for farmers and provide reasons why some financial institutions shy away from providing finance to agricultural enterprises. This study deviates from prior studies which have focused on small-scale farmers and subjected farmers' access to finance to rural credit markets, mostly informal money lenders using secondary information mostly from household surveys to build econometric models. The study indicates that only about 33 percent of formal financial institutions are providing finance to agricultural SMEs. The lack of expertise and perception of risk were cited as top reasons why formal financial institutions find it hard to provide finance to agricultural SMEs. Building on opinions from other authors cited in this paper, we maintain that new financing mechanisms can be achieved by all types of financial institutions through learning from experiences by other successful countries. <![CDATA[<b>The increased use of information and communication technology (ICT) among employees: Implications for work-life interaction</b>]]> Technology has become one of society's everyday functional tools, changing rapidly and providing widespread mobility. In South Africa alone, the number of Internet users grew from 8,5 million to 24,9 million in only three years (2011-2014). Currently, 90 per cent of these users access this facility from their mobile devices. Statistics illustrate that South Africans are moving towards a continuously connected lifestyle, a situation in which information and communication technology (ICT) seems to have become ubiquitous. Given the rapid growth of ITC technology and its absorption into people's lives (both personally and professionally), the general aim of the present research was to investigate the use of ICT among employees and how it affects their work-life interaction (WLI). The researcher employed a qualitative research approach in accordance with which a sample of 25 employees was interviewed. Interviews were recorded, transcribed and processed by means of thematic analyses. Three themes with corresponding sub-themes were extracted: use of ICT (i.e. in both work and family domains); challenges that ICT use presents; and the way in which employees manage their WLI by means of ICT. The participants experienced WLI as mostly negative. However, they also mentioned two different approaches that helped them manage interaction between their work and family domains. These approaches entail 1) applying limits to their use of ICT, and 2) using ICT to create flexibility. This article advises that organisations should consider adopting ICT to assist their employees in the management of these two domains. This could be done in two ways. First, organisations could implement a code of conduct or provide guidelines for eliminating the intrusive and excessive use of ICT, especially after working hours. Secondly, organisations could pilot or implement flexible working hours and possible telecommuting initiatives. <![CDATA[<b>An estimation of the impact of the 2012 platinum-sector strike on the South African economy</b>]]> A Leontief-type economic-impact model for 2012 is used to estimate the potential impacts, in percentage terms, of the 2012 platinum-sector strike on the South African economy. Although it is impossible to incorporate and calculate all the potential impacts, such a model can provide an estimation based on sound statistics and methodologies. Understanding the potential, wider economic impacts of strike action can lead to valuable insights for policymakers, businesses and workers. This will hopefully result in improved policies, as well as enriched negotiations to find solutions to deadlocks in wage negotiations before such deadlocks progress to strike action. Data from the Department of Labour (DoL) shows that 103,155 workers participated in the strike in the metal-ores sector during 2012, and company annual reports indicate that this strike action lasted seven weeks on average. Estimates show that the monetary value of ounces lost by the platinum-related mining industry as a result of lost production during the strike periods amounted to R10.6 billion. Two scenarios are estimated that result in a gross domestic product (GDP) loss for 2012 of 0.53 per cent or R16.5 billion (Scenario 1 ), and of 0.49 per cent or R15.5 billion (Scenario 2). This implies that GDP growth could have been 3 per cent for Scenario 1 and 2.97 per cent for Scenario 2, instead of the actual GDP growth of 2.47 per cent. Exports could have been R9.05 billion higher for Scenario 1 and R8.4 billion higher for Scenario 2. The current-account deficit for 2012 could have been reduced to 4.93 per cent of GDP for Scenario 1 and to 4.9 per cent for Scenario 2, as against the actual deficit of 5.23 per cent. Tax income could have been R3.8 billion higher for Scenario 1 and R3.6 billion higher for Scenario 2. As a result, the government's budget deficit could have been reduced to 5.13 per cent instead of 5.26 per cent. Expressing employment opportunities lost in terms of annual employment opportunities lost as a result of lost activity shows that this represents almost 25,000 employment opportunities for Scenario 1 and almost 23,300 such opportunities for Scenario 2. <![CDATA[<b>Fair pricing, and pricing paradoxes</b>]]> The St Petersburg Paradox revolves round the determination of a fair price for playing the St Petersburg Game. According to the original formulation, the price for the game is infinite, and, therefore, paradoxical. Although the St Petersburg Paradox can be seen as concerning merely a game, Paul Samuelson (1977) calls it a "fascinating chapter in the history of ideas", a chapter that gave rise to a considerable number of papers over more than 200 years involving fields such as probability theory and economics. In a paper in this journal, Vivian (2013) undertook a numerical investigation of the St Petersburg Game. In this paper, the central issue of the paradox is identified as that of fair (risk-neutral) pricing, which is fundamental in economics and finance and involves important concepts such as no arbitrage, discounting, and risk-neutral measures. The model for the St Petersburg Game as set out in this paper is new and analytical and resolves the so-called pricing paradox by applying a discounting procedure. In this framework, it is shown that there is in fact no infinite price paradox, and simple formulas for obtaining a finite price for the game are also provided.