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The Car Guards of Cape Town: A Public Good Analysis

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  • Hayley McEwen
  • Anthony Leiman
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    Abstract

    Car guards have become a part of everyday life for drivers in Cape Town and other metropolitan centres around South Africa. This paper analyses the development and economic functioning of the industry with the understanding that the market exhibits quasipublic good characteristics. Some unusual phenomena are explored. Firstly free riding does not lead to under-provision in the market due to the survivalist nature of the supply, the noncontractual nature of the demand and varied public perceptions. Secondly private firms enter the market as a signalling device for the heterogeneous quality of car guards. Lastly drivers continue to pay car guards in the face of free riding due to varied preference curves and a degree of altruism in rational agents. Twenty detailed case studies are undertaken and the results presented and used to inform the theoretical conclusions made throughout the paper.

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    Bibliographic Info

    Paper provided by Southern Africa Labour and Development Research Unit, University of Cape Town in its series SALDRU Working Papers with number 25.

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    Length: 25 pages
    Date of creation: Oct 2008
    Date of revision:
    Handle: RePEc:ldr:wpaper:25

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    References

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    1. Bradford, David F. & Hildebrandt, Gregory G., 1977. "Observable preferences for public goods," Journal of Public Economics, Elsevier, vol. 8(2), pages 111-131, October.
    2. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    3. Joseph Henrich & Robert Boyd & Samuel Bowles & Colin Camerer & Herbert Gintis & Richard McElreath & Ernst Fehr, 2001. "In search of homo economicus: Experiments in 15 small-scale societies," Artefactual Field Experiments 00068, The Field Experiments Website.
    4. Joseph Henrich, 2001. "In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies," American Economic Review, American Economic Association, vol. 91(2), pages 73-78, May.
    5. Freeman, A. III, 1984. "Depletable externalities and pigouvian taxation," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 173-179, June.
    6. Kalie Pauw & Morné Oosthuizen & Carlene van der Westhuizen, 2006. "Graduate Unemployment in the Face of Skills Shortages: A Labour Market Paradox," Working Papers 06114, University of Cape Town, Development Policy Research Unit.
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    Cited by:
    1. Saunders, Stephen G. & Lynn, Michael, 2010. "Why tip? An empirical test of motivations for tipping car guards," Journal of Economic Psychology, Elsevier, vol. 31(1), pages 106-113, February.

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