Latest News, Publications and Workshops

Latest Publications

Regulatory ambiguity and policy uncertainty in South Africa’s telecommunications sector

The competitive effects of telecommunications transactions and the related impact that they have on economic growth and employment are influenced by the regulatory environment that governs the sector. In South Africa, the Independent Communications Authority of South Africa (ICASA) is responsible for implementing and enforcing ex ante regulation, while the Competition Commission’s role is to identify and remedy anti-competitive behaviour.

Nonlinearities in Financial Development–Economic Growth Nexus: Evidence from sub–Saharan Africa (SSA)

The impact of financial development on economic growth has received much attention in recent literature. However, there are potential discontinuities mediating finance–growth nexus that existing empirical studies have not rigorously examined. This study investigates whether the impact of finance on economic growth is conditioned on the initial levels of countries’ income per capita, human capital and financial development for 29 sub–Saharan Africa countries over the period 1980–2014 using a sample splitting and threshold estimation technique.

Race to the top: Does competition in the DSL market matter for fibre penetration?

Helanya Fourie & Paul de Bijl
High speed broadband access creates potential productivity gains and has a positive impact on economic growth. For a country to achieve higher broadband rollout, it is imperative that the right investment climate is created to encourage fibre network rollout. As a market characterised by strong network effects, much of the focus of European Regulators have been on increasing broadband access by implementing appropriate regulations to encourage uptake and investment. This has also come onto the agenda in South Africa with the ICT White Paper, released in 2016. However, while open access regulations have managed to increase service-based competition and the uptake of broadband services in many European countries, it has not had the desired effect on investment.

This study considers whether and how competition in the DSL market affects the incentives of operators to invest in the deployment of high-end fibre optic networks. Most earlier research on the drivers of investment in broadband technology has focused on the effect of open access policies, such as local loop unbundling, or competing infrastructures. We posit that competition in the DSL sector may also influence fibre penetration, possibly to a considerable extent.

We find that the relationship between service-based competition and fibre penetration is non-linear: low DSL competition is correlated with a negative effect on fibre penetration, but as an intermediate degree of competition is created, more service-based competition may positively influence fibre penetration. This is however only up to a point, where after DSL competition becomes so severe that it limits further fibre penetration. This finding should inform competition authorities’ – such as the Competition Commission – assessment of mergers in the DSL broadband sector. It illustrates that, while it is important to evaluate the effect that broadband mergers may have on the price and quality of DSL services (through improving allocative efficiency), it is equally important to consider the dynamic efficiency effects that such mergers may bring about.

A second important finding is that the scale of these effects varies with the openness of the DSL market: operators’ incentives to invest in fibre appear to be more sensitive to changes in DSL competition if there are extensive open access policies, such as local loop unbundling. This suggests certain nuances to the argument that service-based competition typically has a negative impact on investment in fibre, in that the effect of a change in DSL market concentration on fibre penetration varies with the degree of unbundling that is present. If a country has extensive local loop unbundling, operators’ incentives to invest appear to be more sensitive to changes in DSL competition than if there is limited unbundling. Policy makers need to be aware of this potential medium-term trade-off between implementing mandatory access and encouraging fibre penetration.

Our findings show that achieving the right level of competition may help encourage investment in fibre, and that the existing degree of competition influences the effect that open access policies may have on increasing fibre penetration. South Africa should draw from the experience of the European countries considered in this study, in developing its own policy for fibre broadband rollout. The finding that mandatory access policies in combination with existing competition in the DSL market has implications for future investment in fibre is especially relevant within the context of the open access broadband network called for by the ICT White Paper.

Pricing electricty blackout among South African households

South African households, like households in many other developing countries, are faced with regular power outages. This is a big problem, since the outages that the households experience are both frequent and long in duration. Efficient electricity infrastructure investment decisions are possible only if the welfare loss of electricity blackouts is determined. We estimate a measure for welfare analysis. The surveys were conducted using electronic equipment (gadgets/tablets) instead of the orthodox paper method. We subject respondents to eight power outage scenarios.

South African attitudes about nuclear power: The case of the nuclear energy expansion

The objective of our study is to investigate households’ attitudes and willingness to pay (WTP) for the proposed second nuclear power plant in South Africa. Traditional analysis of such data has tended to ignore zero WTP values. A spike model which explicitly accounts for zero WTP is employed. We also test for effect of distance on WTP. The proximity to the nuclear plant dummy is negative and significant in the probit model, which implies that those who are closer to the plant are more likely to state a zero WTP.

Latest Workshops

Skills Development

Monday, July 3, 2017 to Friday, July 7, 2017

Call for Application for Skills Development Training in Econometrics

The ERSA is pleased to invite applications for the Skill Development Training Programme in basic Econometrics for academics and postgraduate students (masters and PhD) with limited training in Econometrics and quantitative methods. The skills development initiative is in line with ERSA’s objective to deepen economic research capacity and to train young economists in Southern Africa.

7th Annual Meeting of the African Economic History Network: Innovation and the African Past

Wednesday, October 25, 2017 to Friday, October 27, 2017

The African Economic History Network, in association with the Laboratory for the Economics Africa's Past at Stellenbosch University, Harvard Univeristy's Center for African Studies and Economic Research Southern Africa announces a Call for Papers.

Lecture Series in Economic Theory: "Asymmetric Information in Markets and Organizations"

Monday, March 14, 2016 to Tuesday, March 15, 2016
In part 1 of this lecture, we are going to introduce the basic set-up of credence goods markets and discuss how markets should be designed to provide the right incentives for experts and their customers. The theoretical analysis will be complemented by the discussion of evidence of expert behaviour and market outcomes from empirical as well experimental studies. 
 
In part 2 of the lecture, the emphasis will be on information disclosure by interested parties and evidence provision by intermediaries.

The Third ERSA Political Economy Workshop

Tuesday, February 16, 2016 to Wednesday, February 17, 2016

Economic Research Southern Africa (ERSA) and the Institutions and Political Economy Group (IPEG) at the University of the Witwatersrand invite SA-based researchers with a focus on political economy, including public choice, to participate in the upcoming February 2016 workshop. Contributions, even in progress, on all political economy topics will be considered though preference will be given to: corruption, dictatorship, fiscal federalism, intergovernmental grants, political entrepreneurship, and regulation.