Love and Addiction: The Importance of Commitment

The bilaterally monopolistic nature of relationships between part- ners, combined with the addictive nature of love, which represents the emotion people feel during the course of a relationship, results in love growth when re- lationships are based on commitment. However, in relationships with less than perfect commitment, love will wither, and potentially die. In this paper, the path of love through a relationship is examined under the assumption that love is addictive and that partners may or may not be able to commit to a relationship. The differences in the results suggest that cohabiting partners may, by their very lack of commitment at the outset, be unsuited to successful marriages.Addiction, Commitment

Contingent Valuation of Community Forestry Programs in Ethiopia: Observing Preference Anomalies in Double-Bounded CVM

This study examines the potential for anomalous response behaviour effects within the context of double-bounded contingent valuation methods applied to community forestry programs in rural Ethiopia. Anomalous responses considered include shift effects, framing effects and anchoring effects, and these effects are considered within a double-bounded contingent valuation study. The results confirmed the presence of incentive incompatibility and framing effects. However, anchoring effects are not uncovered. After controlling for these biases, the community forestry program considered is shown to offer a welfare gain ranging from Ethiopian Birr (ETB) 20.14 to 22.80. In addition to these welfare benefits, the results raise questions with respect to the validity of previous welfare estimates associated with double-bounded CVM studies in developing countries, suggesting that future studies should control for incentive incompatibility and framing effects bias.Double-bounded CVM, incentive incompatibility bias, anchoring bias

Does One Size Fit All? Heterogeneity in the Valuation of Community Forestry Programs?

Through the implementation of a choice experiment valuation exercise, this study set out to identify the set of community plantation attributes that impact the welfare of potential community forestry program participants. We employed a combination of choice models to evaluate the preferences, welfare impacts and choice elasticities associated with alternative community forestry programs, allowing for different assumptions regarding heterogeneity. In line with economic theory, increased participation costs reduced the demand for community forestry, while increases in expected productivity raised the demand. With respect to preferences for the other alternatives considered - type of forest, area enclosure and type of land upon which the forest was to be situated - the results point to significant differences in preferences across the study population, suggesting that programs should be tailored to the communities in which the program is to be implemented.community forestry, choice experiment, conditional logit, random parameters logit and latent class model

An Analysis of Specialist Surgeons and their Practices

A purposive sample of South African doctors provided data for the analysis of revenues, costs and earnings associated with specialist surgical medicine. Empirical analysis of the data, based on both nonparametric and parametric regression, finds that practice revenues increase by, on average, between R690 and R1050 per new patient, while costs increase by between R690 and 750 per patient. The total number of surgeries performed is not a consistently significant predictor of revenues, although it is a consistently cubic determinant of costs. In terms of total earnings, the total number of patients tends to decrease earnings, while the number of new patients increases earnings. Due to the low response rate in the survey, there is a a need to conduct further research into this topic, to provide better information to both specialists and the South African Department of Health, which sets pay packages for public sector health workers.

RETURNS TO SCHOOLING: SKILLS ACCUMULATION OR INFORMATION REVELATION?

This paper explores the degree to which imperfect information in the labour market regarding worker quality is likely to impact employment opportunities, as well as the wages associated with those opportunities. The primary purpose of this paper is to provide preliminary empirical evidence that market imperfections exist in South Africa's labour market, that those imperfections could be based on asymmetric private information, and that market participants pursue information gathering and revelation strategies to help mitigate the negative effects of the information asymmetries.Information asymmetry, signalling, screening, returns education

Equity in Private Health Insurance Coverage in South Africa: 2002-2007

South Africa, which allowed complete suffrage in 1994, for the first time, has committed itself to improved health outcomes through equitable economic and social development. However, South Africa fares poorly in the World Health Organization’s ranking of health system performance, while spending a large proportion of its Gross Domestic Product on health care, suggesting that inequities in health opportunities and outcomes remain. This paper reports on medical aid scheme coverage rates estimated from a series of nationally representative surveys undertaken in South Africa by Statistics South Africa between 2002 and 2007. The individual’s age group, population group and gender were all used to assess coverage to examine inequalities in health care opportunities. The estimates show that coverage rates are quite low, and differ by age group, population group and gender. Despite government efforts to improve health outcomes for the previously disadvantaged population groups, medical aid access for the most disadvantaged, under apartheid, have not improved over the analyzed time period. The study provides important information related to equitable health care financing, noting that a universal national health insurance plan would need to cover an extremely large proportion of the population, as well as the failure, heretofore, of equalizing access to medical aid schemes across population groups in South Africa.Medical Schemes, General Household Survey

On the performance of fractional multinomial response models for estimating Engel curves

Engel curves are often estimated within a linear, or at least approximately linear system of equations. However, Engel curves are required to lie on or within the unit interval, while summing to unity. These restrictions are not easily accommodated within a linear system. Therefore, we apply the fractional multinomial logit model in our estimation of expenditure shares, because it more readily accommodates these theoretical restrictions. Within our estimation subsample from the South African Income and Expenditure Survey, we find that accounting for these restrictions within the fractional multinomial logit model provides a better fit to the data than does the standard linear system.http://www.tandfonline.comloi/ragr202016-12-22hb201

Catastrophic health payments : does the equivalence scale matter?

We present a revised method for estimating equivalence scales. Such scales are used to adjust household welfare to account for the size of the household, and are used extensively in the application of the World Health Organization’s (WHO) methodology for the evaluation of catastrophic health payments. Applications of the WHO method are underpinned by early estimates that do not control for household income, and, therefore, are likely to overstate equivalence. Thus, in addition to revising the method, we update the scale estimates for one country, South Africa, using more recent data. South Africa is considered, because the end of Apartheid has led to extensive social and economic changes that have influenced household structure and, presumably, equivalence. We also present information on the possible degree to which earlier estimates are overstated, as well as the effect that has on other components of the WHO method, especially the determinants of out-of-pocket expenditures and catastrophic health payments. We find that, in the worst case, initial estimates could be overstated by as much 46%, leading to the understatement of poverty lines by as much as 17%. Despite these large differences, the average incidence of catastrophe in health expenditure was largely unaffected. Instead, differences in scales affect conclusions related to the determinants of out-of-pocket payments and catastrophic health expenditures, as well as the distribution of catastrophe across household size. Given that South Africa has low levels of catastrophic health expenditure, the effect could be even larger in other countries, and, therefore, we recommend that researchers consider a range of scales, when examining catastrophic health expenditures.http://heapol.oxfordjournals.org2019-10-01hj2019Economic

Duopoly competition for rational addicts

This paper provides an examination of an oligopoly market for addictive commodities, specifically cigarettes. The model is characterized by overlapping generations of consumers and differentiated products. A price equilibrium, which is both stationary and symmetric, is characterized. The model accounts for many of the features within the South African tobacco market. Although excise taxes rose in South Africa, and the actual price in the market rose by more than the increase in the excise tax, the model shows that the increase in the price beyond the excise tax was caused by factors other than the change in the tax rate. The model also points to potential empirical problems associated with estimating cigarette market outcomes, due to the fact that the combination of market structure and addiction may greatly impact the assumed exogeneity of the prices used in the analysis

The impact of common property right forestry : evidence from Ethiopian villages

We use inverse probability weighting to examine the effects of a unique two-pronged common-property forestry program in the Gimbo district of Ethiopia, which includes Joint Forestry Management and improved non-timber forest product marketing efforts. The program was found to have affected household access to agricultural land, and, thus, reduced livestock holdings, due to program strictures. Furthermore, despite those reductions, there is evidence that the program had economically significant effects on other activities. Households were able to increase their earnings from non-timber forest products, partly due to an increased labor allocation toward non-timber forest product collection.Volkswagen Foundation/ZIAF and Economic Research Southern Africa.http://www.journals.elsevier.com/world-development/hb201