Doctoral Degrees (Economics)

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Browsing Doctoral Degrees (Economics) by browse.metadata.advisor "Du Plessis, Stan"

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    Conceptual and empirical advances in antitrust market definition with application to South African competition policy
    (Stellenbosch : Stellenbosch University, 2011-12) Boshoff, Willem Hendrik; Du Plessis, Stan; Theron, Nicola; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH ABSTRACT: Delineating the relevant product and geographic market is an important first step in competition inquiries, as it permits an assessment of market power and substitutability. Critics often argue that market definition is arbitrary and increasingly unnecessary, as modern econometric models can directly predict the competitive effects of a merger or anti-competitive practice. Yet practical constraints (such as limited data) and legal considerations (such as case law precedence) continue to support a formal definition of the relevant market. Within this context, this dissertation develops three tools to improve market definition: two empirical tools for cases with limited data and one conceptual decision-making tool to elucidate important factors and risks in market definition. The first tool for market definition involves a systematic analysis of consumer characteristics (i.e. the demographic and income profiles of consumers). Consumer characteristics can assist in defining markets as consumers with similar characteristics tend to switch to similar products following a price rise. Econometric models therefore incorporate consumer characteristics data to improve price elasticity estimates. Even though data constraints often prevent the use of econometric models, a systematic analysis of consumer characteristics can still be useful for market definition. Cluster analysis offers a statistical technique to group products on the basis of the similarity of their consumers. characteristics. A recently concluded partial radio station merger in South Africa offers a case study for the use of consumer characteristics in defining markets. The second tool, or set of tools, for defining markets involves using tests for price co-movement. Critics argue that price tests are not appropriate for defining markets, as these tests are based on the law of one price - which tests only for price linkages and not for the ability to raise prices. Price tests, however, are complements for existing market definition tools, rather than substitutes. Critics also argue that price tests suffer from low statistical power in discriminating close and less close substitutes. But these criticisms ignore inter alia the role of price tests as tools for gathering information and the range of price tests with better size and power properties that are available, including new stationarity tests and autoregressive models. A recently concluded investigation in the South African dairy industry offers price data to evaluate the market definition insights of various price tests. The third tool is conceptual in nature and involves a decision rule for defining markets. If market definition is a binary classification problem (a product is either 'in' or 'out' of the market), it faces risks of misclassification (incorrectly including or excluding a product). Analysts can manage these risks using a Bayesian decision rule that balances (1) the weight of evidence in favour of and against substitutability, (2) prior probabilities determined by previous cases and economic research, and (3) the loss function of the decision maker. The market definition approach adopted by the South African Competition Tribunal in the Primedia / Kaya FM merger investigation offers a useful case study to illustrate the implementation of such a rule in practice.
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    An institutional assessment of the role of sovereign wealth funds in managing resource revenues
    (Stellenbosch : Stellenbosch University, 2016-12) Rietveld, Malan; Du Plessis, Stan; Stellenbosch University. Faculty of Economic and Management Sciences. Economics.
    ENGLISH SUMMARY : This dissertation studies the contribution of sovereign wealth funds to the management of fiscal revenues derived from the extraction of natural resources. The literature on the “resource curse” has increasingly identified the institutional and political-economic foundations of the observed cross-country variation in the management of resource revenues. This literature has found the quality of general (or “meta”) institutions – such as the rule of law, democracy, government accountability and low levels of corruption – to be a critical differentiating factor in determining the success and failure of resource revenue management. The growing consensus around this argument – particularly the recent emphasis on “initial institutions” (the institutional quality at the time of resource discovery) – is noteworthy given the dismissal of the importance of institutions in the early resource-curse literature. From a policy perspective, however, a more productive line of enquiry pertains not to institutions at the general level, but to institutional responses to political-economy problems directly related to the management of resource revenues. Using the tools of institutional economics, the dissertation analyses the governance of sovereign wealth funds and the fiscal frameworks that accompany them. An evaluation of leading sovereign wealth funds and their fiscal rules is presented, as well as an empirical assessment of the impact of various fiscal rules in a number of illustrative country cases. The full embrace of the sovereign wealth fund model requires an often-elaborate institutional infrastructure to govern the policies and operations of independent operational investment authorities tasked with managing the assets. The dissertation therefore assesses the institutional arrangements between the owners and managers of the sovereign wealth fund, and a set rule-based investment policies through which to manage the principal-agent relationship established by the delegation of authority to an independent investment manager. It is contended that sovereign wealth funds can address a number of these specific political-economy and institutional problems, even in the context of relatively poor general institutions. A central argument advanced in the dissertation is that sovereign wealth funds alone have limited effectiveness, and that they should therefore form part of a broader fiscal framework that is rule based, constraining and countercyclical. The model of institutional reform developed here can be described as incremental or piecemeal. Considerable attention is paid to “second-best institutions”, particularly in the areas of fiscal rules and asset allocation, as intermediate steps towards more complex institutional arrangements.