Economics and Finance

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Open Access
Poverty and migration in a transformed South Africa
(University of the Free State, Jan-16) Pool, Antonie; Booysen, Frederik le Roux
Afrikaans: Ten spyte daarvan dat armoede die fokus van baie streeks-, nasionale en internasionale beleidsraamwerke is, leef 54% van die Suid-Afrikaanse bevolking steeds in armoede. Onderwyl dit moeilik is om aan armoede te ontkom, is dit ’n groter uitdaging om die oordrag van armoede tussen generasies te verbreek. Individue en huishoudings wend hulle tot metodes soos migrasie om uit die armoedekringloop te ontsnap. Die doel van die studie was die bestudering van die verband tussen armoededinamika en migrasie in ’n getransformeerde Suid-Afrika. ’n Tweeledige benadering is in die studie gebruik om hierdie verbande te ondersoek. Die eerste benadering het ondersoek ingestel na interhuishoudingsdinamika deur op armoede en die oordrag van intergenerasie-armoede vanaf kern- na dinastiehuishoudings te fokus. Die eerste benadering het ook ondersoek ingestel na migrasie en geldsendings (oordragte) in kern- en dinastiehuishoudings en die invloed daarvan op armoede in dinastiehuishoudings. Die tweede benadering het intradinastiehuishoudingsdinamika verken deur kern- en nie-kernlede in dinastiehuishoudings te vergelyk. Die invloed van die kenmerke van kern- en nie-kernlede op die welsyn van dinastiehuishoudings is ook in hierdie benadering ondersoek. Om hierdie doelwitte te bereik, het die studie gebruik gemaak van die data van die KwaZulu-Natal Income Dynamics Study (KIDS). Die bevindinge van die eerste analitiese benadering dui daarop dat post-apartheid dinastiehuishoudings beter daaraan toe is as hul kern-eweknieë vanweë die hoër gemiddelde en mediaanvlakke van huishoudelike besteding, asook die laer vlakke ten opsigte van die voorkoms, die diepte en die felheid van armoede. Die analise bied bewyse vir die voorkoms van intergenerasie-oordrag van armoede by huishoudings in KwaZulu-Natal. Die waarskynlikheid dat ’n dinastiehuishouding arm sal wees, neem met 40.3% toe indien die huishouding ’n kroniese armoede-agtergrond het. Die bevindinge dui ook op die relatief hoër mobiliteit van kernhuishoudings in die post-apartheid era as vroeër in die laat-apartheid era. Hierdie studie bevestig ook dat migrasie ’n huishoudelike risikoverspreidingstrategie is deurdat dinastiehuishoudings uit ’n kroniese armoede-agtergrond meer waarskynlik is om te migreer, terwyl migrerende dinastiehuishoudings beduidende laer vlakke van armoede as nie-migrerende dinastiehuishoudings ondervind. Die mede-versekeringsmotief vir oordragte is ook bevestig, aangesien dinastiehuishoudings uit ’n kroniese armoede-agtergrond meer waarskynlik is om oordragte te ontvang, terwyl die armoedevlakke ook beduidend laer is in geval van dinastie-huishoudings wat oordragte ontvang. Die bevindings van die tweede analitiese benadering onthul die belangrikheid van intrahuishoudelike dinamika rakende armoede in dinastiehuishoudings. Die bevindings laat blyk dat kern-individue deurslaggewend is vir die voortbestaan van dinastiehuishoudings en waarskynlik ook meer mag bydra tot armoedeverligting in sodanige huishoudings as niekernlede gegewe hul hoër vlakke van opleiding, sosiale kapitaal, arbeidsmarkdeelname en indiensname, asook groter betrokkenheid by oordragte en die ontvangs van maatskaplike toelaes. Die bevindinge van die tweede benadering suggereer ook dat die sosiale kapitaal van familielede belangrik is vir armoedeverligting. Die studie dra by tot die literatuur oor armoede in soverre dit ondersoek instel, enersyds na die verband tussen armoede en armoededinamika en andersyds tussen migrasie en oordragte. Die studie dra ook by tot die literatuur rakende migrasie en oordragte en dra by tot ons begrip van die verband tussen migrasie en die armoededinamika in Suid-Afrikaanse huishoudings.
Open Access
Intra-household decision-making and family public goods: survey and experimental evidence from South Africa
(University of the Free State, Jan-17) Guvuriro, Sevias; Booysen, Frederik
Afrikaans: Besluitneming binne huishoudings is belangrik ten einde verskeie ontwikkelingsdoelwitte te bereik, ingesluit investering in familie openbare goedere en die gepaardgaande ontwikkelings uitkomste, soos die verkryging van opleiding, beter gesondheid en algehele welsyn van families. Die verwesenliking van hierdie ontwikkelingsimpakte van investering in familie openbare goedere vereis ‘n behoorlike begrip van gender dinamika, ekonomiese bemagtiging en samewerking tussen generasies in die neem van besluite binne huishoudings. Hierdie tesis stel ten doel om die rol van intra-huishoudingsbesluitneming in investering in familie openbare goedere in Suid-Afrika vas te stel. Die studie gebruik data van ‘n Suid-Afrikaanse opname en voer ‘n veldeksperiment in twee arm gemeenskappe uit. Beskrywende statistiese ontledings is aangewend om verwantskappe tussen sleutelveranderlikes te bestudeer. Regressie analise is gebruik vir verdere in-diepte ontledings. Die eerste sleutelbevinding van hierdie studie dui spesifiek op die nodigheid van geslagsgebaseerde ekonomiese bemagtigingsbeleid. Die studie bevind dat geslagsongelykheid binne pare (heterogamie) en die breër bevolking van volwassenes steeds ‘n realiteit is. Alhoewel die finansiële en ekonomiese besluitnemersrol deur vroue oorheers word, bly hul rol hoofsaaklik ondergeskik, ‘n verdere teken van geslagsongelykheid. Wanneer vroue egter ekonomies bemagtig word, neem hul besluitnemingsgesag toe en gelyktydig soook uitgawes op familie openbare goedere. Selfs wanneer vroue slegs bemagtig word met besluitnemingsgesag, maar nie ook ekonomies nie, word steeds meer op familie openbare goedere spandeer. ‘n Tweede bevinding daarteenoor staan ook in die algemeen ekonomiese ontwikkelingsbeleid voor. Die studie bevind dat ekonomies bemagtigde mans meer spandeer op familie openbare goedere en dat hul verantwoordelikheid vir ekonomiese besluitneming aan hul vrouens delegeer, wie ook meer op familie openbare goedere spandeer. Die derde resultaat wat in hierdie studie waargeneem is, die skenkingseffek, is belangrik vir beleid gegewe dat die voordeel van ‘n ekonomiese geleentheid vir een familielid, hetsy in die vorm van ‘n werksgeleentheid of ontvangs van ‘n maatskaplike toelaag, na ander familielede kan afwentel. Laastens, bepaal die studie dat kommunikasie ‘n positiewe impak op samewerking tussen generasies binne uitgebreide families het, en dat gesamentlike besluitneming, wat geassosieer word met groter uitgawes op voedsel, kommunikasie vereis ten einde samewerking te weeg te bring. Beleidsgewys, plaas hierdie bevinding die fokus op voorkomende en ontwikkelingsgebaseerde maatskaplike werkprogramme wat kommunikasie binne families kan bevorder, insluitend opleiding in ouerskaps- en huweliksvaardighede.
Open Access
The depth of financial integration and its effects on financial development and economic performance of the SACU countries
(University of the Free State, May-08) Aziakpono, Meschach Jesse; Burger, Philippe; Du Plessis, Stan
Afrikaans: Die studie ondersoek die verhouding tussen finansiële integrasie, finansiële ontwikkeling en ekonomiese groei in die SADU lande. Die empiriese analise begin met 'n ondersoek na die graad van finansiële integrasie in elk van die SADU lande, deur 'n battery van toetse te gebruik. Die resultaat verskaf in alle opsigte oorweldigende bewyse wat aantoon dat die finansiële sektore van die SADU lande individueel hoogs geïntegreer is en dat dit toeneem. Die aanwysers beklemtoon ook 'n duidelike asimmetrie in die kapitaalvloei tussen die banke en die SADU lande, met die kapitaalvloei betekenisvol ten gunste van Suid-Afrika en Namibië in vergelyking met die ander lande. Dit word toegeskryf aan die onderliggende eienskappe van hierdie lande, spesifiek hul swak institusionele ontwikkeling. Die resultate bevestig verder Suid-Afrika se dominante rol in die SADU. Die rentekoersanalises dui ook ondubbelsinnig op 'n hiërargie van die integrasie van die finansiële stelsels van elke lidstaat met die van Suid-Afrika. Namibië is bo-aan die lys, gevolg deur Swaziland, Lesotho en Botswana, in daardie volgorde. Die resultate dui verder ook aan dat die heersende integrasie tussen die finansiële stelsels voortspruit uit beide beleidkonvergensie en markkonvergensie. Die resultate toon egter ook dat, behalwe in Namibië, daar beperkte aktiwiteite tussen die lande bestaan, wat die gevolg kan wees van beide swak institusionele ontwikkeling en beperkte beleggingsgeleenthede, en die onvermoë van beleggers om sodanige geleenthede in die kleiner lande te verken. Die empiriese analise van die verhouding tussen finansiële ontwikkeling, finansiële integrasie en ekonomiese prestasie, wat gebaseer is op ko-integrasie en foutkorrigerende modelleringstegnieke deur die Johansen-benadering te gebruik, verskaf gemengde resultate tussen die SADU lande. By die verhouding tussen finansiële ontwikkeling en uitsetgroei varieer die resultate van land tot land en hang dit van die maatstaf van finansiële ontwikkeling wat gebruik is af. As ‘n geheel verleen die resultaat 'n mate van ondersteuning aan aanbod-leidende finansies oor die SADU lande heen, soos voorgestel deur Patrick (1966). Oor die effek van FO, dui die oorwig van die bewyse op 'n negatiewe jare-lange oorsaaklike effek van finansiële ontwikkeling op die uitsetvlak in die SADU lande, veral as die kredietaanwyser gebruik word. Die toetse vir die effek van die deposito-aanwyser op die uitsetvlak was grootliks onoortuigend, met die uitsondering van Swaziland, waar 'n robuuste positiewe effek gevind is. Die swak effek van finansiële ontwikkeling op ekonomiese groei word toegeskryf aan ondoeltreffendhede in die kredietallokasiemeganisme, weens swak regulasies, banktoesighouding en onderontwikkelde finansiële stelsels asook politieke, institusionele en strukturele probleme in party van die lande. Die resultate bevestig verder 'n langtermyn verhouding tussen finansiële ontwikkeling en finansiële integrasie oor die SADU lande heen. Die resultate bevestig ook 'n sterk terugvoer-verhouding tussen finansiële ontwikkeling en finansiële integrasie oor die lande heen. In alle opsigte is die effek van finansiële integrasie op finansiële ontwikkelinge en vice versa dubbelsinnig en dit varieer oor die SADU lande heen. Bykomend tot die variasie oor die lande heen, hang die bewyse af van die soort kapitaalvoorraad en die maatstaf wat vir finansiële ontwikkeling gebruik is. Dit is derhalwe moeilik om in die algemeen te beslis of finansiële integrasie 'n aanvulling of plaasvervanger vir finansiële ontwikkeling oor die SADU heen is. Laastens toon die resultate aan dat uitset oorheersend endogeen in die vier lande is, terwyl finansiële integrasie hoofsaaklik eksogeen is. Dit suggereer 'n beperkte terugvoerverhouding vanaf uitsette na finansiële integrasie. Wat die effek van finansiële integrasie op die uitsetvlak betref is die resultate gemeng; die effekte varieer van land tot land en hang van die soort kapitaal af. Die effek van Direkte Buitelandse Investering was negatief in Botswana, positief in Suid-Afrika, maar dubbelsinnig in Swaziland. Die verhouding van buitelandse bates van banke het 'n dubbelsinnige effek in Botswana, Lesotho en Suid-Afrika, terwyl geen effek in Swaziland bespeur is nie. Laastens het die verhouding van buitelandse laste 'n positiewe effek in Lesotho en Swaziland, en 'n negatiewe effek in Suid-Afrika, terwyl die effek in Botswana dubbelsinnig is.
Open Access
The impact of the proposed new capital adequacy framework on credit risk management practices of South African banks
(University of the Free State, Nov-02) De Beer, Jesse Ada; Van Zyl, H.
Afrikaans: Die omvang van risiko’s in die finansiële dienste-industrie is groter as ooit tevore in die huidige omgewing van globalisering en toenemende mededinging. Om in pas te bly met veranderings in die risiko omgewing sowel as met die nuutste ontwikkelings in risiko- bestuurspraktyke, word aansienlike uitdagings aan beide banke en bankreguleerders gestel. Vir banktoesighouers is die grootste uitdaging om ‘n benadering tot kapitaalregulering te ontwikkel wat vir ‘n diverse en dinamiese omgewing geskik is. Vir finansiële instellings is die grootste uitdaging om verbeterings in risikometing en bestuurspraktyke op ‘n sistematiese wyse te implementeer en terselftertyd konsepsuele probleme rakende risiko-modelspesifikasie en databeperkings te hanteer. Die Nuwe Kapitaal Reguleringsraamwerk, soos voorgestel deur die Baselse Komitee is ‘n poging om hierdie uitdagings aan te spreek. Die voorgestelde nuwe Baselse Ooreenkoms is ‘n sleutelinisiatief om bankveiligheid en gevolglik ook stabiliteit in die finansiële sektor te versterk. Dit is beide ‘n verreikende en ambisieuse hervorming gemik op die belyning van regulerende kapitaalvereistes en ekonomiese risiko. Die nuwe kapitaalraamwerk hou besliste voordele in bo die bestaande benadering. Die voorstel beweeg weg van ‘n “one size fits all” benadering tot die toesighoudende benadering tot kapitaalvereistes. In plaas van die gebruik van slegs een opsie vir die berekening van kapitaalvereistes, bestaan daar nou ‘n keuse tussen ‘n verskeidenheid benaderings tot die berekening en bestuur van kapitaal. Banke wat ‘n gesofistikeerde benadering tot risikometing en -bestuur volg, sal uit laer kapitaalvereistes kan voordeel trek. Die implementering van die voorgestelde Baselse Ooreenkoms sal verreikende implikasies vir beide individuele banke en finansiële markte inhou. Die implementering van die voorgestelde Baselse ooreenkoms sal egter verskeie uitdagings daarstel, veral in ‘n ontluikende markte konteks. Die doel van hierdie studie is om die uitdagings wat die implementering van die voorgestelde kapitaal ooreenkoms aan Suid- Afrikaanse banke en banktoesighouers stel, te identifiseer. Die mate waartoe Suid-Afrikaanse banke en banktoesighouers voorbereid is om hierdie uitdagings die hoof te bied, word ook aangespreek. Die studie konsentreer op die kredietrisikovoorstelle van die nuwe Kapitaal Ooreenkoms, asook die impak van hierdie voorstelle op Suid-Afrikaanse banke se krediet- risikobestuurspraktyke. ‘n Oorsig van die struktuur van die Suid-Afrikaanse bank sektor word teen die agtergrond van die gesofistikeerde en effektiewe Suid-Afrikaanse finansiële markte gegee en die kwesbaarheid van Suid-Afrika se status as ‘n ontluikende mark word ook aangetoon. Kwanitatiewe indikatore van die veiligheid van ‘n finansiële sektor, soos verskeie aanduiders van kredietrisiko en kapitaaltoereikendheid word gegee. Die studie sluit ook ‘n oorsig in van Suid-Afrikaanse banke se benadering tot kredietrisikobestuur, sowel as die toesighoudende benadering van die Bank Toesighoudings Departement van die Suid-Afrikaanse Reserwebank. Hoewel Suid-Afrikaanse banke ‘n gesofistikeerde benadering tot kredietrisikobestuur en kredietrisikograderings volg, voldoen huidige risiko graderingstelsels nie aan al die vereistes gestel deur die Baselse Kommitee om vir die interne graderingsbenadering (“IRB”) vir die berekening van kapitaalvereistes te kwalifiseer nie . Verskeie waarnemers waarsku dat belangrike voorvereistes vir die suksesvolle implementering van belangrike komponente van die Baselse Ooreenkoms in verskeie ontluikende markte afwesig is. Die resultate van hierdie studie dui daarop dat dit nie die geval in Suid-Afrika is nie. Die FSAP missie beskou Suid-Afrikaanse banktoesighouers as bekwaam en effektief. Die faktore wat die effektiwiteit van minimum kapitaalvereistes in die bevordering van bank veiligheid en stabiliteit in verskeie ontluikende markte bemoeilik, is skynbaar afwesig in die Suid-Afrikaanse banksektor. Hierdie faktore sluit die gebrek aan ‘n likiede kapitaalmark in, wat dit moontlik maak om “lae kwaliteit” kapitaal te verkry, asook ‘n gebrek aan beleidsmaatreëls soos voorsiening vir leningsverliesregulasies wat minimum kapitaalvereistes komplimenteer. Die regulerende raamwerk ten opsigte van Suid-Afrikaanse banke is inderdaad onlangs gewysig ten einde dit in ooreenstemming met internasionale praktyke te bring en om enige beperkings, soos aangedui deur die FSAP, aan te spreek. Implementering van die voorgestelde Baselse Ooreenkoms verteenwoordig nuwe terrein vir Suid-Afrikaanse bankreguleerders, insluitende die evaluering van banke se interne risiko- graderingstelsels. Suid-Afrikaanse bankreguleerders het reeds begin met spesifieke maatreëls om uitdagings, gestel deur die implementering van die nuwe Ooreekoms die hoof te bied. Suid-Afrikaanse banke het ook reeds met voorbereidings vir die implementering van die nuwe Ooreenkoms begin. Al die banke wat in die steekproef ingesluit is, het aangedui dat hulle beplan om die gevorderde interne risikograderingsbenadering (“advanced IRB”) te volg. Die huidige gesofistikeerde benadering tot kredietrisikobestuur en die gebruik van gesofistikeerde modelle in hierdie verband, verteenwoordig ‘n waardevolle platform vir die implementering van die IRB benadering. Die huidige struktuur van Suid-Afrikaanse banke se interne risiko- graderings en die algemene benadering tot die toekenning van risikograderings voldoen egter nie aan al die vereistes gestel deur die Basel Komitee vir kwalifisering vir die gebruik van die interne risiko-graderingsbenadering nie en verskeie wesenlike logistiese uitdagings bly oor. Oor die algemeen blyk dit dat Suid-Afrikaanse banke ‘n gesofistikeerde benadering tot kredietrisikobestuur volg, in ooreenstemming met internasionale standaarde. Die bevindinge van die studie dui daarop dat die groot Suid-Afrikaanse banke die uitdagings voortspruitend uit veraderings in die krediet risiko omgewing aanvaar en reeds geruime tyd besig is met die indentifisering, ontwikkeling en implementering van gesofistikeerde kredietrisiko-modelle en die organisatoriese konteks vir portefeulje-georiënteerde kredietrisikobestuur. Die studie het ook die huidige benadering van Suid-Afrikaanse banke tot interne krediet risikograderings geskets en verskeie internasionale vergelykings getref. Oor die algemeen lyk dit of Suid-Afrikaanse banke se risikograderings praktyke in lyn is met hulle internasionale eweknieë. Die gebrek aan betroubare langtermyn data rakende banklenings is ‘n sleutel uitdaging vir alle gebruikers van interne krediet-gradering stelsels wêreldwyd. Gebruikers sluit in bank- toesighouers wat die risikograderingstelsels moet evalueer vir regulerende kapitaalvereistes. Die gebrek aan sodanige data het negatiewe implikasies vir die vermoë van banke om effektiewe graderingsinstrumente te ontwikkel. Dit bemoeilik ook die verifikasie van die akkuraatheid van banke se gradering stelsels, ten einde onder andere betroubare kwantitatiewe beanderings van waarskynlikheid van wanbetaling te bereken. Al hierdie toepassings is belangrik, nie net uit die oogpunt van banke nie, maar ook uit die oogpunt van bankreguleerders (spesifiek in die lig van die voorstelle om banke se interne risikograderings vir regulerende kapitaalvereistes te gebruik). Die empiriese studie beklemtoon veral op een aspek waar die huidige Suid-Afrikaanse bankpraktyke agterweë bly by internasionale praktyke: die bekendmaking van inligting rakende krediet- risikomodelering en veral kredietrisikograderingstelsels. Dit verteenwoordig ‘n sleutel aspek wat aangespreek behoort te word alvorens die IRB benadering suksesvol geïmplementeer kan word. Behalwe die implemteringsuitdagings in individuele lande, bestaan daar kommer oor die impak van die nuwe Baselse Ooreenkoms op die stabiliteit van wêreldwye finansiële stelsels. Spesifieke faktore wat hierby ingesluit word, is die vrae oor die impak op kapitaalvloeie na ontluikende markte en die potensiële pro-sikliese impak van die nuwe Baselse Ooreenkoms. Die behoefte aan verhoogde koördinasie binne die internasionale gemeenskap ten opsigte van die agenda vir verandering in ’n toenemend geïntegreerde internasionale finansiële stelsel word uitgelig.
Open Access
Die invloed van spoorwegtariewe op die vestiging van nywerhede in Bloemfontein
(University of the Free State, 1957) Border, Thomas Going; Fourie, F. C. van N.
In dealing with the subject of the influence of railway tariffs on the localization of industry in Bloemfontein, it should firstly be pointed out that South Africa has undergone extensive industrial expansion especially during the years following world war II, but, as indicated in Chapter 1, this industrial development has unfortunately been limited to a relatively few concentrated areas namely, Southern Transvaal, Western Cape, Durban Pinetown and to a lesser extent Port Elizabeth. These four regions were jointly responsible for 83,3% of the country’s net industrial production during the year 1951/52. Of these four regions Southern Transvaal is by far the most developed area, having alone been responsible for 48,9% of the Union’s total net industrial production for the same period. Bloemfontein, on the other hand, although classified as the eight most important industrial centre in the Union and after Southern Transvaal the second most important inland industrial centre, is still as an industrial centre very much less developed than more concentrated regions mentioned. The Free State as a whole was during the year 1951/52 responsible for only 3,6% of the total net industrial production. Of the total number of workers employed in industrial concerns with more than 10 employees, Bloemfontein had only 1,7% of this total during the year 1948/19. It is clearly understood that it is difficult to determine with any exactness the actual influence which railway rates exort on industrial location in general. The importance thereof must however not be underestimated as railway rates are inherent in most localization factors such as markets, raw materials, power etc. In determining the influences of railway rates on industrial localization in Bloemfontein, due consideration has been given to the other localization factors such as the proximity of a suitable local and regional market, labour supply, the availability of a sufficient supply of water and power, climate and other general factors. These were found to be generally favourable for further industrial expansion in Bloemfontein. As regards Bloemfontein as market area, it is shown that it possesses a local and regional market which although relatively small in comparison with Southern Transvaal and other concentrated areas, contains the second most important inland market, and a regional market which covers a considerable area. Although this region consists of the more sparsely populated regions of the country, it is a region on the threshold of important developments in respect of mineral deposits in the Western Free State and goldfields. There is also the growing importance of the agricultural areas of the region. It is also shown in chapter 1 that in the absence of any discrimination in railway rates, Bloemfontein’s locality is second only to the Southern Transvaal as regards the cost of distribution within the national market. It is clear that there are definite reasons which go towards making a large market region more attractive for an industrial locality such as, the immediate proximity of a large market, prompt delivery, larger possibilities for expansion, quicker adaptation to changes in demand, the presence of a sufficient labour supply, etc. It is also clear that geographical conditions such as rich mineral deposits were largely responsible for the development and extreme concentration of industries in the Southern Transvaal region, but the fact must not be overlooked that the railway tariff system played an important part assisting industrial expansion in that area. The question is, in which way and to what extent did the railway tariff system encourage this large concentration of inland development in the Southern Transvaal, or in other words to what extent did the railway tariff system reward industrial development in other inland regions, resulting in practically all the industrial development having been restricted to one specific inland region? The most important bearing which railway tariffs have on the localization of industrial enterprises can clearly be conceived from the requirements stated in the South African Act of 1909, which emphasize that the South African Railways and Harbours must be administered on business principles with proper regard to the agricultural and industrial development of the inland regions of all the provinces of the Union. By comparing the requirements of the Act with the actual pattern of inland industrial development which exists at present, one finds rightly enough a considerable inland industrial development, but unfortunately this development is largely limited to on inland region of one province only, with little or no development having taken place in other inland regions. The Railway Administration by means of their tariff system adopted a positive policy towards encouraging the expansion of distribution and industrial concerns in the inland area of the country, but the results of this policy with it’s “maximum”, “distribution” and “nearest harbor” rates, helped towards attracting industry to the Southern Transvaal only, without providing any benefit to other less fortunate inland regions such as Bloemfontein. Irrespective of opinions as to the influence which the South African Railway tariffs have had on the siting of the country’s industries, the fact remains that the country’s extremely centralized industrial development occurred together with a railway rates policy which was extremely discriminatory in it’s application. For this reason also special attention has been given in this study to these discriminating aspects of the previous railway rates system, and their influences on the localization of the country’s industries. Attention is also given to the probably future influence as a result of the abandoning of these discriminating rates and complete revision of the previous rates policy in August 1954. It is found generally that as a result of the higher railway rates on manufactured articles than on the raw materials, the tendency exists to locate industries as near as possible to existing market areas. Considering this tendency together with the fact that the Southern Transvaal is by far the most important national market area, it would only be natural to expect that any railway rates policy which discriminates in favour of this region would only go towards attracting still further industrial expansion within this area. On careful examination of the South African Railway rates, especially those in operation before August 1954, one finds that industries in the Southern Transvaal were not only located within the country’s most important national market, but were also placed within reasonable distance from the other inland and coastal markets as a result of a discriminating rates policy. The distribution rates had the effect of halving the schedule rate, and thus of halving the transport distance in terms of railway rates, from declared distribution centres to other centres in the inland area. This policy also resulted in a considerable decrease in the rate on goods forwarded from distribution centres in the inland area to destination stations in the coastal area (in the instance the difference was taken between the schedule rate from the forwarding station to the harbor nearest to the destination station and the port rate from the destination station to that harbor.) The nearest harbor rate which applied to products of South African manufacture forwarded directly from the place of manufacture, had an even wider effect in that the actual distance between the forwarding and destination stations was not taken into account (except in applying a minimum rate which was considerably lower than the schedule rate), but the distance for rates purposes was that from the destination station to it’s nearest harbor, in cases where this mileage was less than the distance which the goods had to be transported. The reason for these rates was to enable the inland manufacturer to compete favourably with the imported article, but had the effect that a locally manufactured article forwarded for example, from Bloemfontein to Queenstown (distance of 248 miles) was charged the same rate as a similar article manufactured in and forwarded from Johannesburg to Queenstown, which is a distance of more than double that of Bloemfontein to Queenstown. The actual transport distance was also considerably reduced for rates purposes as a result of the application of maximum rates on certain products, such as coal. A further discriminatory aspect which still exists in the published harbour rates, is to be found in the harbour rates between stations in the Southern Transvaal and the ports of Buffalo Harbour and Algoa Bay. These harbour rates in respect of received and forwarded traffic place certain centres in this region approximately 170 miles nearer to Buffalo Harbour and approximately 210 miles nearer Algoa Bay. These different aspects of the Railway rates policy placed industries in the Southern Transvaal in an exceptionally favourable position for the distribution of their products to other market centres in the country, and acted as a strong incentive for industrial localization in that area, but unfortunately on the other hand it seriously handicapped the industrial development of other inland regions such as Bloemfontein. It is thus to be expected that since the major discriminatory aspects of the previous rates policy have been abandoned, conditions will be more favourable for the industrial expansion in Bloemfontein.
Open Access
'n Bedryfsekonomiese ondersoek van die ontwikkeling van die Vrystaatse goudveldstreek
(University of the Free State, 1966) Stockenstrom, Frederik Francois de Wit; Fourie, F. C. van N.; Fourie, Phillip
Abstract not available
Open Access
Die invloed van die goudmyne op die ekonomiese aktiwiteite van enkele dorpe aan die Oosrand vir die tydperk 1930 tot 1970
(University of the Free State, 1979) Kriek, Henry Rudolph; Van Zyl, J. S.
Afrikaans: 'n Stad kan as die ruimtelike konsentrasie van werkende inwoners as gevolg van sekere ekonomiese aktiwiteite wat plaasvind, omskryf word. In die substreek van Benoni, Boksburg, Brakpan en Springs was goud die stimulerende aktiwiteit wat kapitaalbeleggings en arbeid gelok het, en waardeur verskeie belangrike markte totstand gekom het. As gevolg daarvan dat die goudmynbedryf baie winsgewend was, het verdere uitbreiiings voortdurend plaasgevind en was terugwaartse en voorwaartse skakeleffekte voordelig vir die ekonomie, veral in dié sin dat nywerhede totstand gekom het om in die behoeftes van die goudmyne te kon voorsien. Groter indiensneming het gevolg en die verdienstes van die werknemers het 'nl groter vraag na verbruikersgoedere geskep waardeur die betrokke markte en nywerhede gestimuleer was. Hierdie kumulatiewe proses het hand aan hand gegaan met die voordele verbonde aan skaalekonomieë. Bewus van die feit dat die goudmynbedryf 'n verdwynende bate is, het die Suid-Afrikaanse regering sedert 1925 met 'n doelbewuste beskermingsbeleid vir plaaslike nywerhede voor die dag gekom. Dit, sowel as die voorspoedtydperk wat op die goudmyne na die devaluasie van die Suid- Afrikaanse pond op 31 Desember 1932 gewag het, het nywerheidsvestiging gestimuleer. Die invloed van die Tweede Wêreldoorlog wat 'n skaarste aan, en gevolglik 'n prysstyging van, verbruikersgoedere laat ontstaan het, was 'n verdere bydraende faktor tot industrialisasie. Ten spyte daarvan dat die goudmyne in die substreek hul toppunt in 1940 bereik het, het hulle toe alreeds lank genoeg bestaan dat voortgesette streeks-ekonomiese groei, as gevolg van die vermenigvuldiger effek, in die na-oorlogse jare kon voortgaan. Die nywerheidsontwikkeling se bydrae het met die verloop van tyd belangriker as dié van die kwynende uitgewerkte myne se bydrae tot die substreek se groei geword. Die goudmyne het egter nog die buitelandse valuta verdien waarmee masjinerie, en soms ook grondstowwe, vir die fabrieke aangekoop was. Baie potensiële nyweraars het eers na die uitbreek van die Tweede Wêreldoorlog van Suid-Afrika se nywerheidsmoontlikhede bewus geword, en dit het 'n kumulatiewe effek gehad. Nywerhede was meesal in bestaande dorpe gevestig en kon die bestaande fasiliteite soos watertoevoer, elektriesekrag, paaie, spoorlyne, riolering, behuising, ensovoorts, benut. Fabriekswese is verder in die voorsiening van kapitaal deur staatskorporasies aangehelp. As gevolg van die goudmynbedryf het daar oor die jare 'n groot verbruikersmark in die substreek totstand gekom. Dit het veral fabrieke wat mark-georienteercle artikels vervaardig, gelok. Ten spyte daarvan dat die goudmyne algaande gesluit het, het daar geen ontvolking of werkloosheid gevolg nie, omdat die nywerhede algaande meer werkgeleenthede gebied net. Die plaaslike owerhede van die dorpe in die substreek het gunstige voorwaardes aan moontlike nyweraars gebied om hulle te oorreed om hulle in die dorpe te kom vestig. Hierdie aanmoediging het gunstige reaksie uitgelok en die groei van die dorpe was algou nie meer van die goudmynbedryf afhanklik nie. Dorpsontwikkeling in die vorm van nywerheidsgebiede sowel as residensiëlegebiede het voortgeduur in ooreenstemming met die groter vraag daarna. Die aanvanklike basiese kapitaalbeleggings in die goudmyne van die substreek, sowel as die loonverdienste het as basis gedien vir die ontstaan en ontwikkeling van die ekonomiese aktiwiteite van die dorpe. Op grond hiervan, en die opbou van die infrastruktuur gedurende die eerste fase van ontwikkeling, het die industrialisasiefase makliker bereikbaar geword veral as gevolg van die kumulatiewe effek wat dit op markverruiming gehad het. Elke suksesvolle fase van nywerheidsuitbreiding verhoog inkomste en die stedelike bevolking, en dit stimuleer verdere uitbreiding. Die dorpe moes dienste soos behuising, onderwys, water, elektriesekrag, ensovoorts voorsien, en as gevolg van die vraag daarna, het hulle bly groei. Die waarde van hierdie studie lê daarin dat dit leiding aan ander myndorpe kan gee met betrekking tot hul toekomstige, groei en ontwikkeling.
Open Access
The impact of a change in monetary policy by means of a monetary macro-econometric model
(University of the Free State, 2001) De Jager, Shaun; Wessels, G. M.; Pretorius, A. M.
Monetary policy essentially reflects monetary theory. As the financial system is complex and intricate in nature, it becomes virtually impossible to conceive without a theory to simplify its structure. This simplified structure should ideally be geared towards the generation of a transparent financial environment in order to enhance the effectiveness of monetary policy initiatives. To this end, a new monetary policy framework was adopted by the SARB in the year 2000, and is based on achieving a pre-determined inflation target over a specific period of time. The mission of the SARB to protect the value of the domestic currency hence remains the primary objective of the monetary authorities, and any assistance in increasing the transparency of the Bank's monetary policy initiatives will no doubt increase the overall effectiveness of monetary policy. Inflation basically remains a monetary phenomenon and the rates of growth in domestic money supply and bank credit extension are important factors in the new inflation targeting environment. Accordingly, the Bank's actions are aimed at adjusting the repo rate to influence economic expansion and the demand for credit. It is essentially for this purpose that the monetary macro-econometric model has been estimated in this study, and furthermore to elucidate the links between the financial and real sectors of the economy. The model has been structured to reflect money demand theory and how the various domestic economic agents interactively react to a monetary policy impulse. Various alternative monetary policy simulations were performed on the model to determine if the model was robust, and whether it suitably reflected the intricate links between the various key sectors of the economy. The results of the model suggested that it was stable and suitable for policy simulation purposes, and that the monetary transmission mechanism in South Africa is fairly long. In addition, it was found that there was a close relationship between real economic activity and inflation, while the lagged impact on real output growth from a hypothetical change in interest rates was approximately one year. The primary objective of the newly adopted inflation targeting framework is to achieve price and financial market stability over the long-term. As this framework is of a forward-looking nature, it becomes imperative to realise that monetary policy initiatives taken now, will result in (or influence) the possible outcome of the future. This process will even more importantly determine whether the SARB will achieve its inflation target or not. However, the sole purpose of this study was to develop a model that suitably illustrates the key links in the transmission mechanism, and not specifically to determine a model geared towards forecasting the future rate of inflation. The structure and theoretical foundation of the model is not a guarantee for successful monetary policy implementation, but its importance in illustrating the links between the key sectors of the economy cannot be denied. This characteristic makes the model a useful tool in the wide arsenal of operational instruments at the Bank's disposal, and in the process induces an environment in which the monetary policy implementation process becomes more transparent. Afterall, it is the credibility and transparency of the monetary authority that enhances the various stake holders ability to interpret the signalling intentions of the central bank, and it is this that ultimately determines the effectiveness of monetary policy.
Open Access
The relationship between social capital welfare and health in South Africa
(University of the Free State, 2005) Von Maltitz, Michael Johan; Booysen, F. le R.
This paper is concerned with identifying the effects that seven different categories of network social capital (church groups, financial groups, production groups, private interest groups, service groups and political groups) have on household welfare and poverty, as well as individual self-rated health, as measured at the individual-, household- and community-level. Econometric techniques are employed for this purpose, using household- and individual-level panel data from the KwaZulu-Natal Income Dynamics Study (KIDS). The findings show that various social capital network types affect welfare, poverty and health positively. In particular, higher levels of household financial social capital lead to higher welfare levels among the poor (but not the poores t of the poor), and household service and political social capital cause higher welfare among households in general. Households with more financial and political group social capital are also less likely to be poor, and chronically poor. Individual financial group social capital also raises individual health levels, while better health levels result in increase d service group memberships. Thus, policies aimed at building network social capital, not only among the poor but among households in general, may be particularly useful in achieving poverty alleviation and improvements in health status, including current policies of the Department of Social Development.
Open Access
The development status of women in South Africa: patterns, progress and profiles
(University of the Free State, 2009/02/06) Booysen-Wolthers, Annelize; Fourie, F. C. v. N.; Botes, L. J. S.
Afrikaans: ‘n Soeke na redes vir die voortgesette onderskeiding van vroue as synde die armstes onder die armes, ongeag ontwikkelingspogings oor dekades, gee noodwendig aanleiding tot die behoefte om vroue se ontwikkelingstatus te evalueer. In die geval van Suid-Afrika met sy progressiewe geslagsgelykheidsbeleide, getuig sodanige evaluering ook van die sukses waarmee die integrasie van genderaangeleenthede in die samelewing neerslag gevind het in die welsyn van vroue. Die ontwikkelingstatus van vroue in Suid-Afrika, asook die veranderinge in hierdie verband tussen 1996/98 en 2001/3, staan sentraal in hierdie studie. ‘n Gender-gedisaggregeerde aanpassing van die Menslike Ontwikkelingsindeks (MOI) (Engels: Human Development Index – HDI) is ontwikkel en toegepas op Suid-Afrikaanse nasionale en provinsiale data ten einde verskille in die veranderingsvlakke en –koerse van vroue se ontwikkelingstatus vergeleke met dié van mans te bepaal. Die ontwikkelingsgebiede waarop die MOI gebaseer is, is ondersoek om areas wat besonder swak vaar ten opsigte van vroulike ontwikkelingstatus te identifiseer. Die meting van Suid-Afrikaanse vroue se welsyn is uitgebrei deur die MOI-gebaseerde meetinstrumente aan te vul met die Genderontwikkelingsindeks (Engels: Gender Development Index – GDI), die Genderbemagtigingsmaatstaf (Engels: Gender Empowerment Measure – GEM), asook met twee indikatore van ‘magstatus’ – die Besluitnemingsindeks (Engels: Decision-Making Index – DMI) en die Drempelmaatstaf van Vrouestatus (Engels: Threshold Measure of Women’s Status – TMWS). Elk van hierdie indekse bied slegs een perspektief op vroue se ontwikkelingstatus wat ‘n gefragmenteerde beeld verskaf. Ten einde ‘n breër-gebaseerde, holistiese beeld van vroue se welsyn te voorsien, word voorgestel dat ‘n stel indekse gekombineer word in ‘n metingsraamwerk, genaamd die Vroue-ontwikkelingstatusprofiel (Engels: Women’s Development Status Profile – WDSP). Hierdie evaluering van vroue se welsyn vanuit ‘n aantal perspektiewe dra by tot ‘n meer ewewigtige waardebepaling. Die bevindinge van die studie kan soos volg opgesom word: • Tussen 1996 en 2001 het die ontwikkelingstatus van Suid-Afrikaanse vroue op nasionale vlak afgeneem, in sowel absolute as (veral) relatiewe terme. • Hierdie nasionale tendens was teenwoordig dwarsoor die nege provinsies, ofskoon in wisselende mate. • Vroue woonagtig in provinsies met ‘n vooraf bestaande swak absolute ontwikkelingstatus blyk voorbestem te wees om ook ‘n swak ontwikkelingstatus relatief tot mans te hê. • Daar is ‘n kennelike verskil tussen die provinsies ten opsigte van hul absolute en relatiewe ontwikkelingsvlakke. Alhoewel provinsiale rangordepatrone nie noemenswaardig verander het tussen 1996 en 2001 nie, het inter-provinsiale prestasieleemtes ten opsigte van vroulike ontwikkelingstatus in sowel absolute as relatiewe terme gekrimp. • Onderwyl vroulike ekonomiese aktiwiteit in 1996 die vernaamste swak plek op ‘n absolute vlak was, het vroulike lewensverwagting te en 2001 te voorskyn getree as ‘n nuwe knelpunt. Werkloosheid en ongeletterdheid was die swakste punte in terme van relatiewe vroulike ontwikkeling. Die snelle afname in vroulike laerskool bruto inskrywingsratio’s tussen die twee jare verdien verdere ondersoek. • ‘n Vergelyking van die vyf gender-spesifieke indekse het die provinsiale rangordening van die Wes-Kaap en Gauteng bevestig as die beste presteerders in terme van die ontwikkelingstatus van vroue, met Limpopo as die swakste presteerder. In hierdie verband was daar by ander provinsies minder duidelike tendense te bespeur. • Die Vroue-ontwikkelingstatusprofiel (‘WDSP’) toon die relatiewe hoë ontwikkelingstatus van vroue in die Wes-Kaap en Gauteng vergeleke met ander provinsies, terwyl die vroue van Limpopo die swakste vroulike ontwikkelingstatus vir die jare 1996/98 en 2001/03 gehad het. • Die onderskeiding wat die Profiel (‘WDSP’) moontlik maak tussen ontwikkelingspotensiaal en werklike ontwikkeling onthul dat vroulike ontwikkelingspotensiaal betekenisvolle vordering gemaak het tussen 1996/8 en 2001/3, wat neerslag vind in ‘n meer ewewigtige Vroue-ontwikkelingstatusprofiel. Die beduidende afname in die werklike ontwikkelingstatus van vroue, grotendeels toe te skryf aan ‘n afname in lewensverwagting (en bes moontlik verbandhoudend met die impak van MIV/Vigs), is desnieteenstaande besonder onrusbarend. Hierdie proefskrif bied ‘n holistiese en omvattende metingsraamwerk vir die evaluering van die ontwikkelingstatus van vroue, wat hopelik sal lei tot toepaslike beleidstappe en sosiale veranderinge ten einde volhoubare ontwikkeling te verseker.
Open Access
Perceptions of bonus incentive schemes at a major South African private bank
(University of the Free State, 2013) Coetzee, Johan
English: Private bankers are scarce and the type of bonus incentive scheme banks use to attract and retain them plays a vital role in ensuring that they are motivated to perform in accordance with the outputs expected from them. This study assesses the perceptions of private bankers at a major South African private bank of their current discretionary bonus scheme and of the alternative mechanistic approach. The results indicate that they are dissatisfied with their current scheme and prefer one that incorporates many, if not all, aspects of a mechanistic approach. The subjectivity of management and an unclear ‘line-of-sight’ were common reasons provided by the private bankers. This study is the first of its kind to focus on the perceptions of private bankers regarding their bonus incentive schemes in the South African context.
Open Access
The relationship between marital status and life satisfaction among South African adults
(University of the Free State, 2013) Botha, Ferdi; Booysen, Frikkie
English: This article examines the association between marital status and reported life satisfaction in South Africa. Using the 2008 National Income Dynamics Survey, the relationship between marital status and life satisfaction is heterogeneous. In the overall sample, life satisfaction is significantly higher for married compared to widowed individuals, while the former are more satisfied than those from all other marital statuses. In the overall and female samples, married people are more satisfied compared to those from all other marital status groups. Married men are not significantly more satisfied than men from other marital statuses as a whole. Marriage is positively associated with life satisfaction among women, but not among men.
Open Access
Death, denial and dissidents: white commercial farmers’ discursive responses to mass violence in Zimbabwe, 1970-1980
(University of the Free State, 2015) Pilossof, Rory
This article investigates how white farmers in Zimbabwe reacted to two violent episodes in Zimbabwe’s recent history: the liberation war in the 1970s and the violence of Gukurahundi in the 1980s. The foregrounding of violence against white farmers by white farming representatives and mouthpieces in the 1980s was in direct contrast to the almost complete lack of acknowledgement of ‘terrorist’ casualties during the liberation war, and was a deliberate strategy on behalf of white farmers to recast themselves as an ‘endangered’ species that needed government protection. This article analyses how the discursive strategies of narrative violence changed for white farmers from the 1970s to the 1980s. The changing social and political contexts meant that white farmers had to adapt the tactics employed for narrating and discussing violence, with silencing and selective remembering as key components throughout this troubled period.
Open Access
South Africa in the international arms trade network (ATN) during national party rule (1948-1994): a network analysis
(Faculty of the Humanities, University of the Free State, 2015) Senekal, Burgert A.; Stemmet, Jan-Ad; Stemmet, Karlien
South Africa is renowned for its arms industry, which was established under apartheid to counter external threats during the Cold War, increasing internal threats from the black majority, and internationally imposed arms embargoes. The country’s arms industry developed numerous novel and technologically advanced weapons systems, and the war in Angola meant that these weapons systems were proven in combat. While trade with the rest of the world became increasingly difficult as subsequent embargoes were imposed, the country’s perpetual conflicts demanded the import of weapons in any way possible, while the combat-proven nature of South African weapons systems allowed the country to export tried-and-tested weapons systems as well (at least until the late 1980s). This article uses network theory to investigate South Africa’s role in the global Arms Trade Network (ATN) from 1948 to 1994, and discusses South Africa’s overall role and trading partners. It is shown that, in terms of the trade relations in the ATN, South Africa was a central role player throughout the apartheid years, and that its role changed from importer to exporter in the later years.
Open Access
The Johannesburg stock exchange (JSE) returns, political development and economic forces: a historical perspective
(Faculty of the Humanities, University of the Free State, 2015) De Beer, Jesse; Keyser, Nico; Van der Merwe, Ivan
To contribute to economic growth and development a stock market, as a leading economic indicator, should reflect the macroeconomic fundamentals of a country. The reflection of political and economic development in the returns of companies listed on a stock market indicates the risk profile of specific companies and the stock exchange. The objective of this article is to provide a historical perspective on how political and economic developments have been reflected in the returns of the JSE. The history of the JSE was divided into the following broad time periods of roughly similar economic and political developments: 1887-World War II; World War II-1960; and 1960-1990/94. The study concluded that the JSE reflected dramatic macroeconomic conditions, policy changes and political events.
Open Access
South Africa in the international arms trade network (ATN) during national party rule (1948-1994): a network analysis
(Faculty of the Humanities, University of the Free State, 2015-06) Senekal, Burgert A.; Stemmet, Jan-Ad; Stemmet, Karlien
Network theory has become a key theoretical framework with which to study complex systems, and a large number of studies have investigated the structure of the World Trade Network (WTN) within this paradigm. This article follows Åkerman and Larsson‑Seim (2014) in investigating South Africa’s position in the international Arms Trade Network (ATN) from 1994 to the present within the framework of network theory and by using data provided by the Stockholm International Peace Research Institute (SIPRI). Using centrality measures such as degree, betweenness, closeness, and in‑ and out‑degree, the article shows that South Africa is a relatively important role player in this trade network, and specifically as an arms exporter. It is also discussed how South Africa’s position changed under the leadership of consecutive presidents, and it is shown that the country became more active during the presidencies of Thabo Mbeki and Jacob Zuma than it was under Nelson Mandela.
Open Access
The social discounting task in economic experiments: a validation in the field and in the lab
(University of the Free State, 2016) Moloi, Tshepo Godfrey; Booysen, Frederik
Altruism is one of the single most important social preferences driving human behaviour. In Psychology experiments, the Social Discounting Task is employed as a measure of directed altruism. A conventional laboratory experiment was conducted with 117 undergraduate students at the University of the Free State, with students randomly assigned to complete the un-incentivized and incentivized Social Discounting Task. The aggregated results exhibit an inverse relationship between social distance and altruism in accordance with the 1/d law of giving. Multiple regression results show that incentivising of the Social Discounting Task does not matter. Results in this dissertation also suggest that family members are more altruistic towards each other as are those exhibiting greater intergenerational solidarity. Social development programmes that can strengthen families and foster intergenerational solidarity may therefore enhance altruism within the family, thus contributing to greater wellbeing.
Open Access
Incentivized time preferences, level of education in a household and financial literacy: laboratory evidence
(International Foundation for Research and Development, 2018) Mudzingiri, Calvin; Mwamba, John W. Muteba; Keyser, Jacobus Nicolaas
This study investigates the impact of financial literacy, level of education in a household and gender differences on time preferences of students at a university in South Africa. The study relies on a convenient sample of (N=85, female=48%) pursuing a financial literacy course. The study uses a questionnaire, a financial literacy test and a simple binary choice experimental game that elicited individual time discount rate to gather data. Ten percent of the participants were paid (in South African rands) for their time preference choices by way of quota random sampling. Female university students’ individual time discount rate was found to be on average higher than that of their male counterparts, indicating that female university students are generally impatient, especially those with low levels of financial literacy. Our results (using a Negative Binomial Regression analysis and Ordinary Least Squares regression analysis) show that time preferences of university students aresignificantly influenced by highest level of education in the household. The OLS regression model shows that financial literacy, measured using financial literacy test, significantly influence time preferences for all subjects. The study concluded that patience levels among male university students increase as financial literacy increases. Gender, income, age and family size significantly influence time preferences of university students. Highest level of education in a household, financial literacy and gender differences have a bearing on individual time preferences.
Open Access
Financial behavior, confidence, risk preferences and financial literacy of university students
(Cogent OA, 2018) Mudzingiri, Calvin; Mwamba, John W. Muteba; Keyser, Jacobus Nicolaas
This study investigates determinants of financial behavior (FB) of university students at a university in South Africa. It examines whether financial behavior, confidence, time preferences, risk preferences and financial literacy perceptions of university students differ by financial literacy level. Data were gathered via a questionnaire that included personal information, FB, financial perceptions and financial knowledge responses as well as a multiple price list (MPL) risk preferences and time preferences experiment tasks. A convenient total sample of 191 students (females = 53%) participated in the study. A t-test analysis showed that FB, risk preferences, confidence levels, time preferences and financial literacy perceptions of university students significantly differed by financial literacy level. Our results show that university students with low financial literacy levels are more overconfident, risk loving and impatient; such FB is synonymous with major causes of financial crises across the world. An OLS regression model analysis showed that the risk preferences index, financial literacy perception index and confidence significantly influenced the FB of categorized university students. The risk preference index significantly influenced debt FB of categorized university students. In order to understand the FB of university students, one should take cognizance of their preferences, financial knowledge, confidence and personal characteristics.
Open Access
Indecisiveness on risk preference and time preference choices. Does financial literacy matter?
(Cogent OA, 2019) Mudzingiri, Calvin; Mwamba, John W. Muteba; Keyser, Jacobus Nicolaas; Bara, Alex
The aim of this study is to investigate the relationship between financial literacy and decisiveness in making risk preference and time preference choices by university students. The study collected data using a questionnaire, implemented a multiple price list risk preference and time preference experiment, and administered a financial literacy test on 192 university students (female = 53%). A maximum of 7 680 risk preference and 7 680 time preference choices were elicited from the university students. An ordinary least squares regression model shows that multiple switching or indecisiveness on risk preference and time preference choices increase as financial literacy decreases. University students with low financial literacy are more likely to switch back-forth between binary lotteries. Low financial literacy increases behavioural biases and short cuts in making preference choices. Being financial literate helps university students to be decisive in making risk and time preference choices.