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Article
Publication date: 17 January 2019

Dorcas Gonese, Dumisani Hompashe and Kin Sibanda

The purpose of this paper is to examine the impact of electricity prices on sectoral output in South Africa from 1994 to 2015 and also econometrically examine the impact of…

Abstract

Purpose

The purpose of this paper is to examine the impact of electricity prices on sectoral output in South Africa from 1994 to 2015 and also econometrically examine the impact of electricity prices on output at sectoral levels over the same period. The paper also put forth a policy proposal that brings together electricity end-users, suppliers and government regulators with the goal of conveying an effective outcome that withstands output growth without necessarily compromising social and developmental objectives.

Design/methodology/approach

Local sources of data were utilised in applying panel data analysis. The paper utilised the data from South Africa Reserve Bank and Quantec South Africa. The Hausman test indicated that the fixed effect estimator is the appropriate estimator for this paper. Robust estimators (such as Driscoll Kraay (SCC), feasible generalised least of squares, least square dummy variables and seemingly unrelated regression (SUR) were employed for consistent and efficient inferences. The study also utilised the SUR regression to analyse the impact of electricity prices on output at a sectoral level.

Findings

The fixed effect estimator results of this paper indicate that electricity prices have a negative impact on sectoral output. Again, the SUR estimator shows that the sectoral output disparately responds to electricity prices change in South Africa over the period 1994–2015.Thus, six out of eight sectors significantly and negatively respond to electricity prices change in South Africa. The mining and the construction sectors seem not to be affected by electricity prices changes unlike agriculture, manufacturing, government services, transport and communication finance and trade.

Research limitations/implications

Although the research has attained its aims, there were some inevitable limitations. For instance, unlike the time series and cross-sectional data, the panel data were tardily assembled, since the researchers had to gather data for specific variables for each and every selected individual sector. However, this did not compromise the research findings since the panel data from both developed and developing countries are available from sources such as Easy data Quantec.

Practical implications

The results of the study show that electricity price is a limiting factor to the sectoral production growth in South Africa. Therefore, any conservation policies regarding energy or electricity should be implemented with caution. Indeed, the government should implement policies that increase energy and electricity supply in the country. Thus, the government should set affordable prices of electricity that benefits both the power and economic sector output. In addition, the electricity regulators should set prices that do not damage output across economic sectors in South Africa. Again, the government should continue supporting the imposition of subsidies on the economic sectors that are more sensitive to electricity price. To this end, the study provides a policy proposal (in line with the South African National Development Plan and the climatic change strategies) that connects electricity producers, government electricity regulators, consumers and the society with the goal of conveying an effective outcome that withstands output growth without necessarily compromising social and developmental objectives.

Social implications

Cost-reflective electricity prices may be a burden to end users but this will assist in the maintenance and expansion of the power industry to get rid of electricity supply and demand imbalances which may escalate electricity prices in future. Indeed, the electricity end users including the society should pay a price that improves generation capacity to avoid power shortages since the lack of energy (electricity) contributes to poverty and deprivation and can contribute to economic decline. In this regard, the government should work hard to reduce the public resistance towards the cost-reflective electricity prices strategy; there is a need to keep the electricity end users informed on the economic impacts of such strategies in order for them to make informed choices.

Originality/value

This paper utilised the panel data for sectoral analysis. Again, the study aimed to provide policymakers with more information on the behaviour of different sectors with regards to electricity price changes, and hence assisting regulators and policymakers in future decisions on electricity price changes in relation to output at sectoral levels. Better knowledge of the link between electricity prices and the real sector output should permit better regulatory decisions to facilitate economic efficiency. Furthermore, it helps the government to identify sectors in need of power subsidies to enhance economic development.

Details

African Journal of Economic and Management Studies, vol. 10 no. 2
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 1 April 2006

Mohammad Shahadat Hossain

Aims to conceptualise a relational epistemology of development planning emanating from the episteme of oneness of Allah as the worldview of unity of knowledge and to make it…

Abstract

Purpose

Aims to conceptualise a relational epistemology of development planning emanating from the episteme of oneness of Allah as the worldview of unity of knowledge and to make it empirically viable by combining statistical quantification and real‐time simulation in the spatial dimension.

Design/methodology/approach

These two estimation approaches and the empirical results are sequentially interconnected; showing how statistical results that are always static in nature can be dynamically represented by real‐time graphical simulation in spatial representation.

Findings

The policy implication underlying the normative issues interconnecting the statistical results and the spatial dimension real‐time simulation results by vivid simulation is pointed out.

Originality/value

The results are impressive for guiding policy in cases where there are negative partial elasticity coefficients between sectoral gross domestic product and total employment. The same model can be extended in much broader contexts of development planning in inter‐sectoral, national, regional, and global perspectives.

Details

Humanomics, vol. 22 no. 2
Type: Research Article
ISSN: 0828-8666

Keywords

Abstract

Details

An Input-output Analysis of European Integration
Type: Book
ISBN: 978-0-44451-088-4

Abstract

Details

Optimal Growth Economics: An Investigation of the Contemporary Issues and the Prospect for Sustainable Growth
Type: Book
ISBN: 978-0-44450-860-7

Book part
Publication date: 5 January 2006

Marianne Ward and John Devereux

We provide new measures of relative UK and US GDP per capita and output per worker for the crucial years between 1830 and 1870. Our estimates are current price comparisons that…

Abstract

We provide new measures of relative UK and US GDP per capita and output per worker for the crucial years between 1830 and 1870. Our estimates are current price comparisons that compare expenditure on GDP for five benchmark years using new price data. They show that the US leads in income per capita and output per worker compared to Great Britain and the United Kingdom. We check our estimates against sectoral productivity data and real wages.

Details

Research in Economic History
Type: Book
ISBN: 978-1-84950-379-2

Article
Publication date: 29 November 2022

Najimu Saka and Victor Arowoiya

The construction sector (CNS) occupies a very unique position in any economy depending on whether developed or developing economy. The size and linkages of the CNS are expected to…

Abstract

Purpose

The construction sector (CNS) occupies a very unique position in any economy depending on whether developed or developing economy. The size and linkages of the CNS are expected to be high to help push or pull the economy from developing to developed economy through elaborate forward and backward linkages, a cardinal aim of developing economies. This paper aims to investigate the forward and backward linkages of the CNS in the Nigerian economy.

Design/methodology/approach

In contrast to the traditional input–output analysis to assess sectoral economic performance and production interdependence, this paper used econometric techniques, including unit root test, cointegration test and Granger causality test to analyze the data. Time-series data (TSD) for the study were extracted from United Nations Statistical Department database.

Findings

The result indicated that the CNS has low forward linkages but high backward linkages to virtually all the sectors of the Nigerian economy. Thus, the outputs of construction mainly satisfy the manufacturing and other activities.

Originality/value

The paper gives an insight into the construction on backward linkages but less extensive forward linkages. The paper recommends a massive local content development of sector to deepen backward and forward linkages and thus helps pull or push weak sectors out of stagnation.

Details

Journal of Financial Management of Property and Construction , vol. 28 no. 3
Type: Research Article
ISSN: 1366-4387

Keywords

Article
Publication date: 8 October 2018

Zaini Achmad

This paper aims to analyze the superior economic sector by looking at its contribution to the gross regional domestic product (GRDP) of East Kalimantan Province, the economic…

Abstract

Purpose

This paper aims to analyze the superior economic sector by looking at its contribution to the gross regional domestic product (GRDP) of East Kalimantan Province, the economic base, the multiplier effect and the strength of inter-sectoral linkages.

Design/methodology/approach

This study was designed through two research approaches, namely, quantitative and qualitative method. This is intended to complement the results of the phenomenon under study and to strengthen the analysis. Secondary data were analyzed by the level of contribution of the economic sectors to the GRDP, and the base sector was determined through the location quotient approach. The two methods of calculation helped to reveal the dominant economic sectors in East Kalimantan Province. The Input Output (IO) Table in 2016 was made up dated from the 2009 IO Table to be used as a basis for building Social Accounting Matrix data or known as the East Kalimantan Regional Socio-Economic Balance System (SEBS) (a matrix of 49 × 49 sectors) in 2017 by using the RAS method. To be consistent, these SEBS data are then aggregated so all commodities are combined into economic sectors used to determine the leading sector on the East Kalimantan Province SEBS in 2016 (a matrix of 41 × 41 sectors).

Findings

Based on the assessment by scoring of the criteria for determining the leading economic sectors in East Kalimantan, i.e. the contribution of the economic sector to GRDP, the economic base, the multiplier effect (income, production factor, and output) and the linkages between sectors, both backward and forward linkage, shows the ten leading sectors as follows: the trade; paper and printed goods; financial institutions and other financial services; fertilizer; chemical and other rubber products; hotel and restaurant; general government; fisheries; excavation; and mining without oil and gas.

Originality/value

Similar research has never been done before in East Kalimantan; this is one of the originalities of this present study. No previous study has comprehensively studied the mediating effects of tourist value perception on the determination of economic sector, especially in Kalimantan, Indonesia.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 11 no. 3
Type: Research Article
ISSN: 1754-4408

Keywords

Article
Publication date: 11 September 2009

Jyoti Parikh and Probal P. Ghosh

India aspires for high economic growth of around 8‐9 percent over next few years. Higher economic growth would lead to higher production and consumption, more energy use and more…

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Abstract

Purpose

India aspires for high economic growth of around 8‐9 percent over next few years. Higher economic growth would lead to higher production and consumption, more energy use and more CO2 emissions. At a time when CO2 emissions reductions are becoming an important point of debate and fast erosion of fossil fuel reserves all over the world, it is necessary to identify technological choices that reduce CO2 emission and dependence on fossil fuels. A few modeling studies have explored India's technology options. The Integrated Energy Policy (IEP) report of the Planning Commission of India presents different scenarios for energy supply. The IEP model is however an energy technology model and does not consider a feed back into the economy due to changes in technological choice. This paper aims to follow the IEP in the kind of scenario's envisaged and attempts to investigate its macro‐economic impacts.

Design/methodology/approach

The Integrated Research and Action for Development model is an activity analysis model that uses a social accounting matrix to account for inter‐sectoral influence and which allows for a two‐way interaction between energy sectors (coal, oil, natural gas, and electricity) and other sectors of the economy. This paper tries to have three scenarios that are comparable to IEP in terms of specifications and their resultant energy demand (Mtoe).

Findings

The analyses prove that changing technological choice results in gross domestic product gains, and reduction in energy demand and CO2 emission. The results show that the policies considered can have adverse welfare impacts.

Originality/value

This paper helps in providing an insight into the macro‐economic impacts of the IEP scenarios. The two‐way dependence of technological choice and output shows the gains and loses out of moving to more costlier but low emission‐based power generation technology.

Details

International Journal of Energy Sector Management, vol. 3 no. 3
Type: Research Article
ISSN: 1750-6220

Keywords

Book part
Publication date: 8 May 2004

Andrew J. Kliman

During the last two decades, many Marxian economists have brought forth empirical evidence that supposedly supports a version of the “labor theory of value” that Marx rejected…

Abstract

During the last two decades, many Marxian economists have brought forth empirical evidence that supposedly supports a version of the “labor theory of value” that Marx rejected, namely the theory that individual commodities’ prices tend to equal their values. However, recent studies have challenged this conclusion. The present paper offers additional evidence and arguments against it. Firstly, the theory in question implies that prices will be higher, ceteris paribus, in industries in which variable capital is a relatively large component of total cost, but regression analysis of U.S. data compels us to reject this hypothesis. Secondly, although sectoral values and prices are very strongly correlated, simulation results indicate that the observed correlations are no higher than the correlations that can be obtained by aggregation, even if the disaggregated values and prices are uncorrelated and extremely far apart. Finally, many studies have found that average price-value deviations are small, but it is shown here that this finding is meaningless, since aggregation of the data tends systematically to reduce measures of average deviation.

Details

Neoliberalism in Crisis, Accumulation, and Rosa Luxemburg's Legacy
Type: Book
ISBN: 978-0-76231-098-2

Abstract

Details

Handbook of Transport Strategy, Policy and Institutions
Type: Book
ISBN: 978-0-0804-4115-3

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