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The relationship between accounting choices and share prices : a study of South African listed companies

  • Authors: Bunting, Mark Bevan
  • Date: 2009
  • Subjects: Financial statements -- South Africa , Accounting -- South Africa , Managerial accounting -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:989 , http://hdl.handle.net/10962/d1002724 , Financial statements -- South Africa , Accounting -- South Africa , Managerial accounting -- South Africa
  • Description: It is widely assumed that the managers of companies behave in a self-interested and opportunistic manner when making the discretionary accounting choices that are applied in the preparation of published financial reports. Empirical research has found evidence for this in the United States, Britain, Spain, France and Australia, amongst other countries. There has, however, been no prior work of a similar nature in a South African context. The purpose of this study is to extend this body of work by examining the relationship between a number of potentially opportunistic (profit-increasing, income-smoothing and solvencyimproving) accounting choices made by the managers of South African listed companies, and growth rates in the share prices of those companies. Data in respect of thirty-nine medium-sized South African listed companies are analysed for evidence of the expected positive relationship between opportunistic accounting choices and share price growth. No evidence is found for this relationship. This may be due to limitations in the research design, inadequacies in the interpretation of the agency theory from which the hypotheses are developed, or a combination of both. Refinements in the research design or a re-interpretation of the theory may be successful in addressing these matters as part of future research efforts.
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  • Date Issued: 2009

Valuing preferences for freshwater inflows into five Eastern Cape and Kwazulu-Natal estuaries

  • Authors: Chege, Jedidah
  • Date: 2009
  • Subjects: Estuarine ecology -- South Africa -- Eastern Cape , Estuarine ecology -- South Africa -- Kwazulu-Natal , Freshwater ecology -- South Africa -- Eastern Cape , Estuaries -- South Africa -- Eastern Cape , Estuaries -- Management -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:8990 , http://hdl.handle.net/10948/932 , Estuarine ecology -- South Africa -- Eastern Cape , Estuarine ecology -- South Africa -- Kwazulu-Natal , Freshwater ecology -- South Africa -- Eastern Cape , Estuaries -- South Africa -- Eastern Cape , Estuaries -- Management -- South Africa
  • Description: An estuary, according to the National Water Act of 1998, is a partially or fully enclosed body of water which is open periodically or permanently to the sea within which the sea water can be diluted, to an extent that is measurable with freshwater from inland. Estuaries and the lands surrounding them are places of transition from land to sea, and from freshwater to saltwater. Although influenced by the tides, estuaries are protected from the full force of ocean waves, winds, and storms by the reefs, barrier islands, or fingers of land, mud, or sand that surround them. South Africa’s estuaries are important and irreplaceable habitats, especially for prawns, fish, wading birds and mangroves. They are home to numerous plants and animals that live in water that is partly fresh and partly salty. Estuaries are also homes to growing coastal communities as increasing number of people occupy watersheds. However, estuaries are also threatened. One of the threats is reduced river water inflow. This study applies the contingent valuation method (CVM) to elicit user’s willingness to pay to mitigate the negative impacts of reduced freshwater inflow into selected five Eastern Cape and Kwazulu-Natal estuaries: the Sundays, Gamtoos, Mdloti, Mgeni and Mvoti estuaries. In addition to the contingent valuation method, the travel cost method was used to generate comparative values. The contingent valuation method is a technique to establish the value of a good (or service) that is not bought or sold in an actual market. The CVM establishes the economic value of the good by asking the users of an environmental good to state their willingness to pay (WTP) for a hypothetical project to prevent, or bring about, a change in the current condition of the environmental good. The users’ WTP is aggregated to establish a total willingness to pay (TWTP) for the population of the users of the environmental good.
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  • Date Issued: 2009

Valuing preferences for freshwater inflows into selected Western and Southern Cape estuaries

  • Authors: Akoto, William
  • Date: 2009
  • Subjects: Estuarine ecology -- South Africa , Freshwater ecology -- South Africa , Estuaries -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:8992 , http://hdl.handle.net/10948/915 , Estuarine ecology -- South Africa , Freshwater ecology -- South Africa , Estuaries -- South Africa
  • Description: An estuary is the last stage of a river. It is where the river meets the sea. Estuaries are one of the most significant features of the South African coastline. In recent years, South Africa has witnessed an increase in the demand for freshwater for both industrial and domestic purposes. At the same time, there has been a gradual deterioration of river systems and their catchments. To add to this, there has been a gradual reduction in the amount of recorded rainfall, which is the primary source of freshwater for rivers. This has resulted in decreased freshwater inflow into estuaries, a situation which poses a serious threat to the biological functioning of these estuaries and the services rendered to its recreational users. A deterioration of estuary services reduces the yield for subsistence households and their appeal for recration. This study uses the contingent valuation method as its primary methodology to elicit users' willingness-to-pay to reduce the negative impacts of reduced freshwater inflow into selected western and southern Cape estuaries. Eight estuaries were selected for this study; the Breede, Duiwenhoks, Great Berg, Kleinemond West, Mhlathuze, Swartvlei and Olifants estuaries. The contingent valuation (CV) method is widely used for studies of this nature because of its ability to capture active, passive and non-use values. The CV method involves directly asking people how much they would be willing to pay for specific environmental services. In this case, users were asked what they would be willing to pay to sustain freshwater inflows into selected estuaries in order to prevent the negative impacts of reduced inflows. The travel cost method (TCM) was uesed to generate an alternative comparative set of values for the purposes of convergence testing. This is because convergence testing is highly desirable as a validity test for CV estimates.
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  • Date Issued: 2009

A comparison between the South African "source rules" in relation to income tax and the "permanent establishment rules" as contained in double taxation agreements

  • Authors: Fourie, Leonie
  • Date: 2008
  • Subjects: Income tax -- South Africa , Income tax -- Law and legislation -- South Africa , Double taxation -- South Africa , Business enterprises -- Taxation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:905 , http://hdl.handle.net/10962/d1008203
  • Description: South Africa's right to tax the income of a non-resident is determined in terms of the South African "source rules" established by court decisions in relation to the imposition of tax in terms of the Income Tax Act. Unless a non-resident's income is captured by the South African "source rules" (on the basis that hi slits income is derived from a South African source), South Africa would have no right to tax such income, even if such non-resident creates a permanent establishment in South Africa by performing business activities within South Africa which could be considered essential (but not dominant) in nature. In such scenario the activities performed by the non-resident in South Africa may utilise the natural resources and the infrastructure of South Africa, but the South African fiscus would be deprived of the right to any tax revenues attributable to the income produced partly by such activities within South Africa. The South African "source rules" refer only to the main or dominant activities giving rise to the income for the purpose of determining the source of such income (and accordingly the right to tax such income). On the other hand, the "permanent establishment rules" as set out under the Organisation for Economic Cooperation and Development Model Tax Convention on Income and on Capital refer to all the taxpayer's essential business activities for the purpose of determining whether or not such activities create a pennanent establishment. The result of the narrow nature of the South African "source rules" is that, under certain circumstances, the South African fiscus would not necessarily be granted the right to tax all income produced partly within South Africa. The research demonstrated that incorporating the principles underlying the "pennanent establishment rules" into South African legislation would be a reasonable and logical solution to the problem of detennining the source of income. In so doing, the South African "source rules" would determine the source of income, and consequently South Africa's taxing rights, with reference to the essential business activities giving rise to such income. In such case South Africa would be afforded the right to tax the income of a non-resident in the event that it performs any of its essential business activities within South Africa, albeit not the dominant or main activities giving rise to the income.
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  • Date Issued: 2008

A comparison of the values of water inflows into selected South African estuaries : the Heuningnes, Kleinmond, Klein, Palmiet, Cefane, Kwelera and Haga-Haga

  • Authors: Dikgang, Johane
  • Date: 2008
  • Subjects: Estuaries -- South Africa -- Cost efffectiveness , Water-supply -- South Africa -- Economic aspects
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:8994 , http://hdl.handle.net/10948/804 , Estuaries -- South Africa -- Cost efffectiveness , Water-supply -- South Africa -- Economic aspects
  • Description: “An estuary is a partially or fully enclosed body of watera) which is open to the sea permanently or periodically; b) within which the sea water can be diluted, to an extent that is measurable, with freshwater drained from inland” (National Water Act, 1998). Estuaries are ecologically important because they are habitats for birds, fish and plants and they are valuable because they provide human beings with food (fish) and recreational pleasure in the form of unique views, bird watching and opportunities for swimming and boating. It is in this context that they may be said to provide economic goods and services for current and future generations. The provision of these services is dependent on the inflow of freshwater into estuaries. The problem with estuarine freshwater demand is that estuaries are the ‘last in line’, literally and perhaps in the typical prioritisation of human wants by government. Clearly it is imperative that the value of freshwater inflows into estuaries be determined and these values incorporated into catchment management decision making. South African estuaries have in the past mainly been managed on a piecemeal basissometimes in the interest of fishermen, sometimes property development owners and sometimes other local interest groups. This situation changed with the National Water Act of 1998. One of its objectives was to address the mismanagement and inadequate research about water inflow impacts on estuaries (Allanson and Baird, 1999). The global warming phenomenon is going to negatively affect estuaries and put more pressure on the availability of freshwater inflows into estuaries, as well as the availability of drinking water. The majority of South African estuaries are temporally open/closed and experiencing reduced functioning due to reductions of freshwater inflow to them. Given the overwhelming evidence available on the significance of freshwater inflow to estuary functionality, it is clear that an important component of catchment management is the allocation of river water into estuaries. Economic guidance comes in the form of comparisons of value. There are seven estuaries for which values were generated, the Heuningnes, Kleinmond, Klein, Palmiet, Cefane, Kwelera and Haga- Haga. All of the seven estuaries fall in areas characterized by warm temperate climates and low rainfall levels. Estuary services, like many other environmental services, are not traded in the markets. For this reason, in order to estimate their value, reference must be made to proxy markets, and methods of valuation have to be employed that can use proxy market information - like the contingent valuation method (CVM), the travel cost method (TCM) and the hedonic pricing method (HPM). For the purpose of this research the CVM was preferred because it is best suited to including passive or nonuse values. The CVM estimated values are compared with other values generated using the TCM. The information required to make the CVs was gathered through surveys in at the seven selected estuaries from December 2005 to April 2006. From this information sample mean and median Willingness to Pay (WTP) values for freshwater were calculated, socio economic profiles were generated, the importance that respondents attached to various activities in the estuary was deduced, and, Tobit and Ordinary Least Squares (OLS) statistics models were used to predict household WTP. The Total WTP (TWTP) for each estuary was obtained by multiplying the median WTP by the total number of households that use the estuary. The median WTP is preferred to the mean WTP because of a skewed bid distribution of WTP among the users. The value per m3 of freshwater was obtained by dividing the TWTP by the total forecast reduction in water inflows into the estuary.
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  • Date Issued: 2008

An analysis of exchange rate pass-through to prices in South Africa

  • Authors: Karoro, Tapiwa Daniel
  • Date: 2008
  • Subjects: Foreign exchange rates -- South Africa , Monetary policy -- South Africa , Inflation (Finance) -- South Africa , Prices -- South Africa , Banks and banking -- South Africa , South Africa -- Economic policy
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:953 , http://hdl.handle.net/10962/d1002687 , Foreign exchange rates -- South Africa , Monetary policy -- South Africa , Inflation (Finance) -- South Africa , Prices -- South Africa , Banks and banking -- South Africa , South Africa -- Economic policy
  • Description: The fact that South Africa has a floating exchange rate policy as well as an open trade policy leaves the country’s import, producer and consumer prices susceptible to the effects of exchange rate movements. Given the central role that inflation targeting occupies in South Africa’s monetary policy, it becomes necessary to determine the nature of influence of exchange rate changes on domestic prices. To this end, this thesis examines the magnitude and speed of exchange rate pass-through (ERPT) to import, producer and consumer prices in South Africa. Furthermore, it explores whether the direction and size of changes in the exchange rate have different pass-through effects on import prices, that is, whether the exchange rate pass-through is symmetric or asymmetric. The paper uses monthly data covering the period January 1980 to December 2005. In investigating ERPT, two main stages are identified. The initial stage is the transmission of fluctuations in the exchange rate to import prices, while the second-stage entails the pass-through of changes in import prices to producer and consumer prices. The first stage is estimated using the Johansen (1991) and (1995) cointegration techniques and a vector error correction model (VECM). The second stage pass-through is determined by estimating impulse response and variance decomposition functions, as well as conducting block exogeneity Wald tests. The study follows Wickremasinghe and Silvapulle’s (2004) approach in estimating pass-through asymmetry with respect to appreciations and depreciations. In addition, the thesis adapts the analytical framework of Wickremasinghe and Silvapulle (2004) to investigate the pass-through of large and small changes in the exchange rate to import prices. The results suggest that ERPT in South Africa is incomplete but relatively high. Furthermore, ERPT is found to be higher in periods of rand depreciation than appreciation which supports the binding quantity constraint theory. There is also some evidence that pass-through is higher in periods of small changes than large changes in the exchange rate, which supports the menu cost theory when invoices are denominated in the exporters’ currency.
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  • Date Issued: 2008

An analysis of the use of limited real rights in tax planning

  • Authors: Green, Christopher Terrence
  • Date: 2008
  • Subjects: Tax planning , Income tax -- Law and legislation -- South Africa , Limited liability
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:8958 , http://hdl.handle.net/10948/809 , Tax planning , Income tax -- Law and legislation -- South Africa , Limited liability
  • Description: The aim of this treatise is to provide an analysis of the tax implications of making use of limited real rights in tax planning. In order to understand the tax implications of making use of limited real rights it is necessary to understand the nature and legal form of these rights. The importance of this understanding lies in the determination of the tax legislation applicable to the right in question, and the subsequent tax implications. The next step in working through an analysis of the tax implications of making use of limited real rights is therefore to define the scope of applicable legislation. This required an analysis of the scoping provisions of our tax legislation. Once the scope of applicable legislation had been defined, it was then possible to move onto an analysis of the application of the legislation identified to the various “stages” of limited real rights. The conclusion from this analysis is that the tax implications of making use of limited real rights are spread fairly broadly across several different pieces of legislation, and need to be carefully and fully considered when making a decision to make use of limited real rights in a tax planning strategy. The conclusion on the analysis of certain selected tax planning strategies that make use of limited real rights is that it is possible to make fairly substantial cash flow savings when deciding to implement a particular strategy which makes use of limited real rights. But, that use of these strategies is not without risk. For example, SARS may examine a particular strategy in terms of the “new” GAAR. The financial implications of the successful application of the GAAR may be disastrous to the taxpayer, and the tax planner will need to have considered and advised on the possibility of such a challenge from SARS. In addition, in some of the strategies, there are risks associated with the anticipated life expectancy of parties to the tax plan being shorter than anticipated. The conclusion is that the use of limited real rights in tax planning can be effective and provide savings, but that the use of such a strategy requires, inter alia, a very careful consideration of the interaction and application of our tax legislation to the strategy.
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  • Date Issued: 2008

An appraisal of basic infrastructural service delivery and community participation at the local level a case study of three municipalities in the Eastern Cape

  • Authors: Mamba, Bonginkosi
  • Date: 2008
  • Subjects: Municipal services -- South Africa -- Eastern Cape Case studies , Housing policy -- South Africa -- Eastern Cape Case studies , Housing -- South Africa -- Eastern Cape Case studies , Local government -- South Africa -- Eastern Cape Case studies
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:958 , http://hdl.handle.net/10962/d1002692 , Municipal services -- South Africa -- Eastern Cape Case studies , Housing policy -- South Africa -- Eastern Cape Case studies , Housing -- South Africa -- Eastern Cape Case studies , Local government -- South Africa -- Eastern Cape Case studies
  • Description: Housing provision plays a vital role in meeting basic needs. Dwellings provide the security required for basic functioning and are thus essential for both human development and the alleviation of poverty. This study examines the levels and quality of basic infrastructural service delivery (electricity, water and sanitation) at local government level, focusing on housing. The local government areas studied include Grahamstown Fort Beaufort and Duncan Village. This was done for the purposes of analyzing the effectiveness of the existing housing policy with regard to the adequacy of scale, its developmental logic, implementation and coordination. Justification for basic infrastructural service delivery is based on the Basic Needs Approach [BNA] which forms the cornerstone of the World Bank’s delivery framework. The paper makes use of two methods: firstly, secondary sources are used to provide an impression of the broad policy framework focusing around basic service delivery with housing as the centrepiece. Specific attention is thus given to Integrated Development Plans (IDPs) as this is the level of policy-making responsible for the delivery of these services to communities. Secondly, previously un-analysed data drawn from a household social exclusion survey (2005-2006) conducted in three Eastern Cape municipalities (Buffalo City, Makana and Nkonkobe – representing respectively urban, small town, and rural areas) are evaluated. The data are analysed two ways – graphically and through a regression analysis – to test four hypotheses regarding basic service delivery. Graphical analysis demonstrates that services differ according to housing type and location. It was found that brick houses seem more likely to have better basic services than either shacks or mud dwellings. The results also show that there are inequalities in the provision of certain basic services such as water and sanitation between Duncan Village and Grahamstown. Overall, the results of this study show that government is still faced with major challenges in addressing housing backlogs.
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  • Date Issued: 2008

An economic evaluation of waste telecommunication cable disposal in South Africa : a case study

  • Authors: Lottering, Tony
  • Date: 2008
  • Subjects: Recycling (Waste, etc.) -- South Africa , Refuse and refuse disposal -- South Africa , Telecommunication -- Equipment and supplies -- Environmental aspects
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:8993 , http://hdl.handle.net/10948/808 , Recycling (Waste, etc.) -- South Africa , Refuse and refuse disposal -- South Africa , Telecommunication -- Equipment and supplies -- Environmental aspects
  • Description: South African manufacturers, including those who produce electrical and telecommunication cables, are required by the National Waste Management Strategy (NWMS) (drawn up by the Department of Environmental Affairs and Tourism (DEAT)), to carry out waste management in a coordinated and controlled manner. It is also becoming more difficult for South African companies, who produce for export markets, to conduct business internationally if they do not have some form of environmental management system in place. While there will always be scrap generated in any manufacturing environment, the aim is, first and foremost, to reduce this to acceptable levels and, secondly, to dispose of all scrap produced in a socially responsible manner. This study focuses attention on waste management, in the form of recycling, in the cable manufacturing industry. The purpose of this study is twofold: first, to examine the economic case, by means of a cost-benefit analysis, for the establishment and operation of a telecommunication cable waste recycling plant for the purpose of recycling copper conductor; second, to examine the economic feasibility, by means of a cost-benefit analysis, of extending the existing facility in order to accommodate the recycling of the plastic fraction contained in the cable waste. A specific cost-benefit stream was generated over a project period of 20 years for both CBAs. In both CBAs costs and benefits were categorised as being either primary or secondary. The primary costs and benefits for both CBAs were all financial in nature and were valued using market prices. The secondary costs of establishing and operating a cable waste recycling plant for recycling the copper conductor included effluent costs and noise pollution costs. The secondary benefits, on the other hand, included the creation of downstream industries. The secondary costs of extending an existing cable waste recycling plant, so as to accommodate the recycling of the plastic component of cable waste, included costs related to the generation of greenhouse gases and asthma. The secondary benefits, conversely, included the increase in house prices due to the reduction of landfilling of the plastic component of cable waste. The determination of increased house prices due to landfill avoidance was carried out using the hedonic pricing method (HPM). The hypothesis was that house values would increase the further removed they were from the landfill site. Applying regression analysis to the derived hedonic pricing (HP) function showed that there is a definite correlation between the two. Properties positioned two kilometres from a landfill site in New Brighton Port Elizabeth, Eastern Cape, were found to have higher values than those positioned adjacent to the site. From the cost-benefit streams, net benefits were calculated for each CBA and discounted to present values in order to provide a standard of comparison. The social discount rate used in this study to calculate the present values reflected a combination of the social opportunity costs of capital and the social time preference rate. The rate used was calculated as the average annual rate between 2000 and 2005 and amounted to 6.72 percent. It was derived from a combination of the opportunity costs of government borrowings, household consumption borrowings and return on savings.
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  • Date Issued: 2008

An empirical analysis of the long-run comovement, dynamic returns linkages and volatility transmission between the world major and the South African stock markets

  • Authors: Chinzara, Zivanemoyo
  • Date: 2008
  • Subjects: Stock exchanges -- South Africa , Globalization -- Economic aspects -- South Africa , International economic relations , Portfolio management -- South Africa , Monetary policy -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:970 , http://hdl.handle.net/10962/d1002704 , Stock exchanges -- South Africa , Globalization -- Economic aspects -- South Africa , International economic relations , Portfolio management -- South Africa , Monetary policy -- South Africa
  • Description: The international linkages of stock markets have important implications for cost of capital and portfolio diversification. Recent trends in globalization, financial liberalization and financial innovation raises questions with regard to whether African stock markets are being integrated into world equity markets. This study examines the extent to which the South African (SA) equity market is integrated into the world equity markets using daily data for the period 1995-2007. The study is divided into three main parts, each looking at the different ways in which integration can be considered. The first investigates whether there is long run comovement between the SA and the major global equity markets. Both bivariate and multivariate Johansen (1988) and Johansen and Juselius (1990) cointegration approaches were utilised. Vector Error Correction Models (VECMs) are then estimated for portfolios which show evidence of cointegration. The second part analyses returns linkages using the Vector Autoregressive (VAR), block exogeneity, impulse response and variance decomposition. The third part examines the behaviour of volatility and volatility linkages among the stock markets. Firstly volatility is analysed using the GARCH, EGARCH and GJR GARCH. Simultaneously, the hypothesis that investors receive a premium for investing in more risky stock markets is explored using the GARCH-in mean. The long term trend of volatility is also examined. Volatility linkages are then analysed using the VAR, block exogeneity, impulse response and variance decomposition. The first part established that no bivariate cointegration exists between the SA and any of the stock markets being studied, implying that pairwise portfolio diversification is potentially worthwhile for SA portfolio managers. However, multivariate cointegration exists for some portfolios, with the US, UK, Germany and SA showing evidence of error correction for some of these portfolios. Findings on return linkages is that there are significant returns linkages among the markets, with the US and SA being the most exogenous and most endogenous respectively. Findings regarding volatility are that the volatility in all the markets is inherently asymmetric and that except for the US there is no risk premium in any of the markets. The long term trend of volatility in all the stock markets was found to be relatively stable. The final finding was that significant volatility linkages exist among the markets, with the US being the most exogenous and SA and China showing evidence of bidirectional linkages. Overall, except for volatility linkages, the integration of SA into the global equity markets is still quite low. Thus, both SA and international investors can capitalise on this portfolio diversification potential. On the other hand, policy makers should capitalise on this and make policies that will attract the much needed foreign investors.
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  • Date Issued: 2008

An evaluation of product quality and consumer satisfaction in the FMCG market : Pick 'n Pay hypermarket, Port Elizabeth

  • Authors: Hallam, Edward James
  • Date: 2008
  • Subjects: Quality of products -- Management , Quality of products -- Evaluation , Consumer satisfaction -- South Africa -- Port Elizabeth
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:9364 , http://hdl.handle.net/10948/974 , Quality of products -- Management , Quality of products -- Evaluation , Consumer satisfaction -- South Africa -- Port Elizabeth
  • Description: In an intensely competitive retail market, keeping consumers satisfied has never been more important than currently. Retailers need to understand how to satisfy their customers in order to enhance their appeal and increase consumer loyalty. Globally people’s lifestyles are changing rapidly. Advances in technology, more flexi-time of customers, and the many other social and economic changes affecting family and home life are some of the reasons why, specifically in the Fast Moving Consumer Goods (FMCG) industry, it is important to act fast to service customers. In South Africa, there is indication of strong competition between the most dominant firms’ in the FMCG market, which include Pick ‘n Pay Holdings Limited (23.8 percent), Shoprite Holdings Limited (23.8 percent), the Spar Group Limited (14.9 percent), and Woolworths Holdings Limited (9.0 percent). As a result, it is unmistakable that in order for FMCG firms to grow and survive in the constantly changing, and competitive retail environment of South Africa, they must have a clear understanding of consumer’s expectations, as well as their actual shopping experiences. As stated, service quality for retailers of FMCG is of utmost importance to their level of success and ability to successfully cater for the market’s needs. Closely linked to this, is the focus of this study, namely to investigate consumers’ perceived levels of product quality, as well as the overall level of satisfaction experienced by customers. The purpose of this analytical research project is twofold: Firstly, to empirically test the hypothetical model and the associated hypotheses (as phrased in Section 1.4) by using confirmatory statistical techniques. Secondly, based on the findings of the research, to craft appropriate retail marketing strategies within the FMCG market that are suitable for implementation to address potential mismatches (gaps) of perceived product quality and consumers’ satisfaction. By the crafting of appropriate retail strategies, the potential to develop the FMCG industry in South Africa will be enhanced. Given the purpose and nature of the research in question, a positivistic research paradigm was adopted. The utilization of a Likert seven-point scale enabled primary data to be sourced from 301 consumers’ (respondents), who shared their perceptions on the expectations and actual experiences about the product quality of FMCG in South Africa. The statistical analysis of quantitative data comprised seven distinct phases. Firstly, the data was subjected to a confirmatory factor analysis to validate the measurement model by assessing the construct (convergent, discriminant and nomological) validity of the pre-specified (predicted) factors. Secondly, the reliability (internal consistency) of the research instrument was assessed by means of Cronbach alpha reliability coefficients. This phase was followed by a multiple linear regression analyses which were used to test the impact of independent variables on the intervening variable. In order to test the second set of hypotheses (null and alternative hypotheses dealing with consumers’ expected product quality and their actual experiences) matched paired t-tests were utilized. Additionally, mean scores and relative percentage ratings on consumers’ expected and perceived product quality levels were also calculated and interpreted. Finally, bivariate linear regression analyses were used to test the third set of hypotheses (impact of consumers perceived product quality on consumers overall level of satisfaction). The findings of the multiple linear regression analyses required that the hypothetical model be reconstructed. Two variables were removed from the hypothetical model, namely, ‘South African culture’ and ‘service promises’. The findings of the matched pair t-tests show that significant statistical differences do exist between the ‘expectations’ and ‘actual experiences’ of consumers’ perceived product quality to support the hypothesis H3.A, namely: “There are no perceived differences between consumers’ expectations and their perceptions (actual experience) of product quality”. Besides the matched pair t-tests, further descriptive statistical analyses were also performed to assess the magnitude of the “gap” between expectations and actual experiences of consumers on South African FMCG product quality, such as the values for Cohen’s d and relative percentage ratings. The findings reveal that the consumers’ were not completely satisfied with their actual experiences. Three sets of conclusions and recommendations were identified for this research. Firstly, conclusions emanating from secondary sources on product quality and consumers’ satisfaction literature were provided, such as consumer satisfaction is seen more as a psychological state, which reveals an overall feeling of consumers’ purchase and consumption experience with FMCG. Secondly, the conclusions linked to the interpretation of the empirical findings revealed significant statistical differences between the expectations and perceptions (actual experiences) of consumers’ on perceived product quality. Finally, recommendations on relevant FMCG retail marketing strategies can be grouped into five domains:  To build customer-led firms which adhere to the principles of true marketing orientation where the focus is on consumers and their needs and wants.  Identify and clearly define the FMCG market in South Africa which comprises different market segments that are of great importance for the retail firms.  The decision on a proper positioning strategy entails the choice of the target market segments, which will determine where and how the FMCG firm competes and the choice of differential advantages.  Retailers should apply suitable marketing strategies to benefit optimally from their FMCG retail marketing strategies.  A sound feedback system is a necessary component in the strategic marketing plan to obtain proper feedback that would contribute to the “management by exception” principle. It further will facilitate performance evaluation of product quality and service delivery, as well as and enable corrective actions to be taken in the case of deviations from the norm.
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  • Date Issued: 2008

Interest rate risk management : a case study of GBS Mutual Bank

  • Authors: Williamson, Gareth Alan
  • Date: 2008
  • Subjects: GBS Mutual Bank , Interest rates -- Case studies , Interest rate risk -- Case studies , Risk management -- Case studies , Financial risk -- Case studies , Banks and banking -- Case studies
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:986 , http://hdl.handle.net/10962/d1002720 , GBS Mutual Bank , Interest rates -- Case studies , Interest rate risk -- Case studies , Risk management -- Case studies , Financial risk -- Case studies , Banks and banking -- Case studies
  • Description: Banks play a pivotal role in the economic growth and development of countries, primarily through the diversification of risk for both themselves and other economic agents. Interest rate risk is regarded as one of the most prominent financial risks faced by a bank. A large portion of private banks’ revenue stems from net interest income that is generated from the difference between various assets and liabilities that are held on the balance sheet. Fluctuations in the interest rate can alter a bank’s interest income and value, making interest rate risk management vital to its success. The asset and liability committee of a bank is the internal committee charged with the duty of managing the bank’s interest rate risk exposure through the use of various hedging strategies and instruments. This thesis uses a case study methodology to analyse GBS Mutual Bank interest rate risk management. Its specific business circumstances, balance sheet structure and the market conditions over a specified period are used to comment on the practicality of a variety of balance sheet positioning strategies and derivative hedging instruments. The thesis also provides recommendations for the bank’s asset and liability committee in terms of its functions and organisation. It is elucidated that the most practical balance sheet hedging strategies are a volume strategy and immunisation, while the most practical derivative hedging instruments are interest rate futures and interest rate collars. It is found that the bank has a well functioning asset and liability committee whose only encumbrance to its functionality is the inadequacy of the informational technology used to measure, control and manage its interest rate risk position. This thesis concludes by summarising the practicality of the various interest rate risk hedging alternatives available to the GBS Mutual Bank. Implementing a particular strategy or instrument depends, of course, on its asset and liability committee’s decision.
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  • Date Issued: 2008

Normative indications for Xhosa-speaking unskilled workers on the trail making test and the stroop test

  • Authors: Andrews, Karen Anne Hope
  • Date: 2008
  • Subjects: Neuropsychology , Neuropsychological tests -- Sex differences , Educational tests and measurements -- Sex differences , Xhosa (African people) -- Education
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:2926 , http://hdl.handle.net/10962/d1002435 , Neuropsychology , Neuropsychological tests -- Sex differences , Educational tests and measurements -- Sex differences , Xhosa (African people) -- Education
  • Description: The aim of the study was to produce preliminary normative indications for the Trail Making Test and the Stroop Test, administered in English, on a non-clinical sample of black, Xhosa-speaking, unskilled individuals (N = 33), with an educational level of 11 – 12 years, in two age categories (18 –29 and 30 – 40 years). The sample was equally distributed for gender and level of education. Participants, who were required to have a basic proficiency in English, were from traditionally black township schools with relatively disadvantaged quality of education. Within-sample age and gender effects were investigated. There were no significant age effects on the Trail Making Test, whereas there was one significant difference between age groups on the Stroop Test with respect to the Color-Word task, and a result that strongly approached significance on the Word task, with the younger group performing better than the older group. There were no significant gender effects on the Trail Making Test, whereas there was one significant difference between genders on the Stroop Test with respect to the Word task, and a result that approached significance on the Color task, with females performing better than males. Normative indications for both measures were compared to available normative data on western populations with higher levels and more advantaged quality of education. This comparison revealed consistently poorer performances for both the Trail Making Test and the Stroop Test, confirming the need for localised normative datasets to facilitate accurate neuropsychological diagnoses on culturally disadvantaged individuals.
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  • Date Issued: 2008

The distinction between tax evasion, tax avoidance and tax planning

  • Authors: Tarrant, Greg
  • Date: 2008
  • Subjects: South African Revenue Service , Tax evasion -- South Africa , Tax planning -- South Africa , Income tax -- South Africa , Income tax -- Law and legislation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:897 , http://hdl.handle.net/10962/d1004549
  • Description: Tax avoidance has been the subject of intense scrutiny lately by both the South African Revenue Service ("the SARS") and the media. This attention stems largely from the recent withdrawal of section 103(1) together with the introduction of section 80A to 80L of the South African Income Tax Act. However, this attention is not limited to South Africa. Revenue authorities worldwide have focused on the task of challenging tax avoidance. The approach of the SARS to tackling tax avoidance has been multi-faceted. In the Discussion Paper on Tax Avoidance and Section 103 (1) of the South African Income Tax Act they begin with a review of the distinction between tax evasion, tax avoidance and tax planning. Following a call for comment the SARS issued an Interim Response followed by the Revised Proposals which culminated in the withdrawal of the longstanding general anti-avoidance rules housed in section 103(1) and the introduction of new and more comprehensive anti-avoidance rules. In addition, the SARS has adopted an ongoing media campaign stressing the importance of paying tax in a country with a large development agenda like that of South Africa, the need for taxpayers to adopt a responsible attitude to the management of tax and the inclusion of responsible tax management as the greatest measure of a taxpayer's corporate and social investment. In tandem with this message the SARS have sought to vilify those taxpayers who engage in tax avoidance. The message is clear: tax avoidance carries reputational risks; those who engage in tax avoidance are unpatriotic or immoral and their actions simply result in an unfair shifting of the tax burden. The SARS is not alone in the above approach. Around the world tax authorities have been echoing the same message. The message appears to be working. Accounting firms speak of a "creeping conservatism" that has pervaded company boardrooms. What is not clear, however, is whether taxpayers, in becoming more conservative, are simply more fully aware of tax risks and are making informed decisions or whether they are simply responding to external events, such as the worldwide focus by revenue authorities and the media on tax avoidance. Whatever the reason, it is now critical, particularly in the case of corporate taxpayers, that their policies for tax and its attendant risks need to be as sophisticated, coherent and transparent as its policies in all other areas involving multiple stakeholders, such as suppliers, customers, staff and investors. How does a company begin to set its tax philosophy and strategic direction or to determine its appetite for risk? A starting point, it is submitted would be a review of the distinction between tax evasion, avoidance and planning with a heightened sensitivity to the unfamiliar ethical, moral and social risks. The goal of this thesis was to clearly define the distinction between tax evasion, tax avoidance and tax planning from a legal interpretive, ethical and historical perspective in order to develop a rudimentary framework for the responsible management of strategic tax decisions, in the light of the new South African general anti-avoidance legislation. The research methodology entails a qualitative research orientation consisting of a critical conceptual analysis of tax evasion and tax avoidance, with a view to establishing a basic framework to be used by taxpayers to make informed decisions on tax matters. The analysis of the distinction in this work culminated in a diagrammatic representation of the distinction between tax evasion, tax avoidance and tax planning emphasising the different types of tax avoidance from least aggressive to the most abusive and from the least objectionable to most objectionable. It is anticipated that a visual representation of the distinction, however flawed, would result in a far more pragmatic tool to taxpayers than a lengthy document. From a glance taxpayers can determine the following: That tax avoidance is legal; that different forms of tax avoidance exist, some forms being more aggressive than others; that aggressive forms of tax avoidance carry reputational risks; and that in certain circumstances aggressive tax avoidance schemes may border on tax evasion. This, it is envisaged, may prompt taxpayers to ask the right questions when faced with an external or in-house tax avoidance arrangement rather than simply blindly accepting or rejecting the arrangement.
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  • Date Issued: 2008

The influence of organisational culture on organisational commitment at a selected local municipality

  • Authors: Van Stuyvesant Meijen, Jolise
  • Date: 2008
  • Subjects: Local government -- South Africa , Corporate culture -- South Africa , Organizational change -- South Africa , Municipal services -- South Africa , Employee loyalty
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1172 , http://hdl.handle.net/10962/d1002788
  • Description: Since 2000, local municipalities have been through a process of transformation which amalgamated a number of smaller local municipalities into larger municipalities. The amalgamation of a number of municipalities brings together an array of people, and therefore a myriad of organisational cultures are combined. The organisational culture of an organisation has an effect on the organisational commitment of its employees. A fit between the organisational culture and the employees will increase the organisational commitment of those employees and contribute towards improved service delivery. A survey conducted in South Africa indicated that the local municipalities have been delivering poor standards of service to the community; therefore there is a need to increase the service delivery within local municipalities. The importance of looking at the organisational commitment of a local municipality is because if there is commitment within the organisation, then employees will identify with their organisation and its goals, and will deliver the service more effectively and efficiently. Therefore, increasing the service delivery of local municipalities can be achieved through diagnosing the organisational commitment and organisational culture of employees within the selected municipality. The primary objective of this research was therefore to diagnose the relationship between organisational culture and the organisational commitment of employees at the selected municipality. In order to achieve this objective, a survey was conducted to canvas the opinions of respondents (N = 148) from the selected local municipality regarding their perceptions of the existing organisational culture, their preferences regarding the organisational culture within the selected municipality, and finally the organisational commitment. The main findings of this research conducted at a selected municipality can be summarised as follows: The dominant existing organisational culture is the power culture, while the dominant preferred organisational culture is the support culture; There is an organisational culture gap between the existing and preferred organisational cultures at the selected municipality; The dominant organisational commitment within the selected municipality is normative commitment; The findings pertaining to the relationship between organisational culture and organisational commitment of employees within the selected municipality can be stated as follows: The existing organisational cultures have significant effects on the organisational commitment of employees; The preferred organisational cultures do not have significant effects on the organisational commitment of employees; and The organisational culture gap does not have a significant effect on the organisational commitment of employees; The findings pertaining to the relationship between the biographical variables and the existing and preferred organisational culture, organisational commitment and the organisational culture gap can be stated as follows: There is no significant relationship between biographical variables and the existing organisational culture; There are significant relationships between the biographical variables, namely the departments in which respondents work, and the education level of respondents, and the preferred organisational culture; There are significant relationships between the biographical variables and organisational commitment; and The average organisational culture gap scores of the organisational culture scales for the biographical variables are significantly different. It can be concluded that organisational culture has a significant effect on the organisational commitment of employees within the selected municipality and therefore can affect the service delivery of the selected municipality.
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  • Date Issued: 2008

The role of experience in the development of bar managers' social competencies

  • Authors: Dhaya, Jateen
  • Date: 2008
  • Subjects: Hospitality Industry -- Management , Bars (Drinking establishments) -- Management , Social skills , Executive ability , Interpersonal communication , Experience
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1177 , http://hdl.handle.net/10962/d1002794 , Hospitality Industry -- Management , Bars (Drinking establishments) -- Management , Social skills , Executive ability , Interpersonal communication , Experience
  • Description: This research study analysed the role that experience played in the development of bar managers’ social competencies. Given the social nature of the bar environment, social competencies were perceived to be essential managerial competencies that enable bar managers to manage employees and consumers to ensure that employee and consumer satisfaction is maintained. The literature reviewed discussed the importance of managerial competencies and the composition of social competencies. Experience was conceptualized to develop an understanding of the informal learning method through which competency development occurs. Data was captured through face-to-face interviews, which were based on the Critical Incident Technique (CIT). The data was analysed using the open coding procedures of grounded theory. This research study proposed a process to explain how experience contributed to the development of social competencies. The proposed process, which is called the Social Competency Cache Development Process (SCCD Process), ultimately indicated that experience contributed to bar managers’ social competencies through a reflection process, the residues of experience, and through the familiarity of situations and results. This research study found that experience contributed to the development of bar managers’ social competencies within a process that established an awareness of unfamiliar social competencies or reinforced the effects of familiar effective social competencies. Experience was also found to promote the transition between novel situations and familiar situations, which in turn enabled bar managers to effectively assess social situations and select effective responses to social situations. Consequently, experience improved the probability of bar managers implementing effective social competencies to ensure employee and consumer satisfaction. In essence, experience shaped bar managers’ accumulation of social competencies by promoting the addition of new social competencies or the reinforcement of existing social competencies.
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  • Date Issued: 2008

The tax implications of a private equity buy-out : a case study of the Brait-Shoprite buy-out

  • Authors: Mawire, Patrick N
  • Date: 2008
  • Subjects: South African Revenue Service , Consolidation and merger of corporations -- Finance , Taxation -- Law and legislation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:8959 , http://hdl.handle.net/10948/803 , South African Revenue Service , Consolidation and merger of corporations -- Finance , Taxation -- Law and legislation -- South Africa
  • Description: This treatise examines the history of private equity as a context in which to understand its role in the economy and specifically, the background for the high profile leveraged buy-outs that have been entered into in the past year. The treatise then focuses specifically on the Brait-Shoprite buy-out, examining its structure and the tax implications. The treatise then reviews the reaction of the South African Revenue Authority (“SARS”) to the buy-out and evaluates whether it was the best approach that could have been taken under the circumstances. As a result of the research, the following conclusions have been reached: Private equity transactions Private equity transactions have a role to play in the business world despite the apprehensions of tax authorities. The perception that these transactions are tax driven as part of an avoidance scheme is not justified. Structure of the Shoprite buy-out transaction: The Shoprite buy-out transaction was structured to obtain deduction for interest. The transaction was also structured to utilise the relief provisions of Part II of Chapter II (Special Provisions Relating to Companies) of the Income Tax Act no.58 of 1962, as amended (“the Act”). The relief was for capital gains tax (“CGT”) on disposal of the Shoprite assets. Finally, the transaction was designed to allow the existing shareholders to exit their investments free of Secondary Tax on Companies (“STC”). The reaction of SARS to the Shoprite buy-out transaction Whereas SARS may have been justified in questioning the structure and its impact on fiscal revenue, the response in the form of withdrawing STC relief from amalgamation transactions in section 44 was not in the best interest of a stable tax system and the majority of tax payers who are not misusing or abusing loopholes in the income tax legislation. It may have been possible for SARS to attack the structure based on the General Anti-Avoidance Rule (GAAR) in part IIA of the Chapter III of the Act.
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  • Date Issued: 2008

The tax implications of non-resident sportspersons performing and earning an income in South Africa

  • Authors: Wessels, Jacques
  • Date: 2008
  • Subjects: South African Revenue Service , Sports -- Taxation -- Law and legislation -- South Africa , Taxation -- Law and legislation -- South Africa , Income tax -- Law and legislation -- South Africa , Income tax -- Foreign income , Income tax -- South Africa -- Foreign income , Withholding tax -- Law and legislation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:893 , http://hdl.handle.net/10962/d1003719 , South African Revenue Service , Sports -- Taxation -- Law and legislation -- South Africa , Taxation -- Law and legislation -- South Africa , Income tax -- Law and legislation -- South Africa , Income tax -- Foreign income , Income tax -- South Africa -- Foreign income , Withholding tax -- Law and legislation -- South Africa
  • Description: As the number of non-resident sports persons competing in South Africa increases so does the need to tax them more effectively. It was for this reason that the South African legislature decided to insert Part IlIA into the Income Tax Act which regulates the taxation of non-resident sports persons in South Africa. The new tax on foreign sports persons, which came into effect during August 2006, is a withholding tax placing the onus upon the organizer of the event to withhold the tax portion of the payment to the non-resident sportsperson and pay it over to the revenue services. The rate of taxation has been set at 15 percent on all amounts received by or accruing to a foreign sportsperson. The question which the research addressed is whether this new tax will prove to be an effective tax, both from the point of view of its equity and the administration of the tax. In order to determine the impact of the new tax, it was compared to similar taxes implemented in the United Kingdom and Australia and also to other withholding taxes levied in South Africa. The new tax was also measured against a theoretical model for effectiveness, compared to the pre-August 2006 situation and to the taxation of resident sportsmen and women, using hypothetical examples. The major shortcomings of the new withholding tax are the uncertainty with regard to the intention of the legislature on matters such as the taxation of capital income versus revenue income, the question whether payments to support staff are included in the ambit of the new tax, the taxation of the award of assets in lieu of cash payments and the definition of a resident. A further area of concern is that the rate of taxation of 15 percent appears to be too low and creates horizontal inequity between the taxation of resident and non-resident sports persons. The new tax on non-resident sports persons may have its shortcomings but, depending upon the administrative and support structures put in place to deal with it, will be an effective tax. The rate at which the tax is levied could result in a less tax being collected than before but, with the reduced administrative cost of tax collection, the effective/statutory ratio of the tax could well be much higher than it was. This is a new tax in South Africa and certain initial problems are inevitable and will undoubtedly be solved as the administrators gain experience and as the case law governing this tax develops. , KMBT_363
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  • Date Issued: 2008

Trends and determinants of inward foreign direct investment to South Africa

  • Authors: Rusike, Tatonga Gardner
  • Date: 2008
  • Subjects: International business enterprises -- South Africa , Investments, Foreign -- South Africa , Economic development -- South Africa , Macroeconomics -- South Africa , Foreign exchange rates -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:995 , http://hdl.handle.net/10962/d1002730 , International business enterprises -- South Africa , Investments, Foreign -- South Africa , Economic development -- South Africa , Macroeconomics -- South Africa , Foreign exchange rates -- South Africa
  • Description: Foreign direct investment (FDI) is seen as a way to provide the needed capital inflow to stimulate growth in a domestic economy. FDI can also result in increased employment levels, managerial skills and increase in technology. In efforts to attract FDI, host countries have undertaken various policy incentives to attract foreign investors. This study analyses the trends and determinants of inward FDI to South Africa for the period 1975-2005. The study starts by reviewing FDI literature on its determinants and provides the macroeconomic background and FDI related policies undertaken in South Africa. The trend and sectoral analysis provides the actual nature of FDI flows to South Africa. An empirical model linking theoretical and empirical determinants of FDI is estimated using the Johansen cointegration and VECM framework. The study also augments the cointegration framework with impulse response and variance decomposition analyses to complement the long and short run determinants of FDI. Dummy variables are used in each of the estimated FDI models to take into account the possibility of structural breaks. Results show that relative to the size of the economy and to other developing countries, South Africa still receives low levels of inward FDI. Only are few years are exceptional i.e. 1997, 2001 and 2005. From the sectoral distribution, the financial sector is now the major recipient of FDI followed by the mining and manufacturing sectors. The emergence of the financial sector could suggest that FDI motives could have shifted from the natural resource seeking and market seeking to efficiency seeking FDI. The United Kingdom emerges as the major source of FDI to South Africa followed by United States of America and Germany. Empirical analysis indicated that openness, exchange rate and financial development are important long run determinants of FDI. Increased openness and financial development attract FDI while an increase (depreciation) in the exchange rate deters FDI to South Africa. Market size emerges as a short run determinant of FDI although it is declining in importance. Most of the impulse response analysis confirmed the VECM findings. Variance decomposition analysis showed that FDI itself, imports and exchange rate explain a significant amount of the forecast error variance. The influence of market size variable is small and declining over time.
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  • Date Issued: 2008

Willingness to pay for the control of water hyacinth in an urban environment of South Africa

  • Authors: Law, Matthew Charles
  • Date: 2008
  • Subjects: Water hyacinth -- Control -- South Africa , Urban ecology (Sociology) -- South Africa , Biodiversity -- Economic aspects -- South Africa , Biodiversity conservation -- Economic aspects -- South Africa , Biological invasions -- Economic aspects -- South Africa , Biological invasions -- Environmental aspects -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:996 , http://hdl.handle.net/10962/d1002731 , Water hyacinth -- Control -- South Africa , Urban ecology (Sociology) -- South Africa , Biodiversity -- Economic aspects -- South Africa , Biodiversity conservation -- Economic aspects -- South Africa , Biological invasions -- Economic aspects -- South Africa , Biological invasions -- Environmental aspects -- South Africa
  • Description: Water hyacinth is recognised as one of the most problematic invasive aquatic plant species in Africa. For this reason considerable funds are spent each year on itscontrol. As a consequence of the amount of money being spent on problems such as the invasion of water hyacinth, and because of the recognition of the ongoing and accelerated efforts that are required in the future, recent research has focused on accurately quantifying the costs and benefits of control of invasive species to aid policy decisions.A comprehensive cost-benefit analysis would be able to identify if the funds are justified and are being spent effectively. This thesis provides an example of a cost-benefit analysis of funds spent on the control of water hyacinth in an urban environment in South Africa. In order to develop a comprehensive assessment of the total economic value of the control of water hyacinth to an urban population, the Nahoon River in East London was selected as the study site to calculate the benefits of control. In addition to valuing the direct services provided by the resources that are traded in the market (in this case water provision), a contingent valuation study was undertaken in Abbottsford and Dorchester Heights (two suburbs in East London banking the Nahoon River). These were done in order to assess any non-use value a sample of 132 households of the population has for the control of water hyacinth, and any use values that are not traded in the market, for example recreational value. When the benefits of control of water hyacinth were compared to the costs of one of the least cost effective methods of control (herbicidal control), the benefits outweighed the costs by a ratio of more than 4:1, and for the most cost effective method of control the ratio was almost 6:1. These results provide a justification for the funds that are devoted to the control of water hyacinth, providing an argument for the continued expenditure for its control, and for further research into more cost effective methods of control, such as biological control.
  • Full Text:
  • Date Issued: 2008
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