IDEAS home Printed from https://ideas.repec.org/p/pre/wpaper/201527.html
   My bibliography  Save this paper

The Short Term Economic Impact of Levying E-Tolls on Industries

Author

Listed:
  • Francois J. Stofberg

    (Department of Economics, University of Pretoria)

  • Jan H. van Heerden

    (Department of Economics, University of Pretoria)

Abstract

TERM is used to analyse the short term regional economic impact of an increase in industries’ transport costs when paying E-Tolls. Market-clearing and accounting equations allow regional economies to be represented as an integrated framework; labour adjusts to accommodate increasing transportation costs, and investments change to accommodate capital that is fixed. We concluded that costs from levying E-Tolls on industries are relatively small in comparison to total transport costs, and the impact on economic aggregates and most industries are negligible: investments (-0.404%), GDP (-0.01), CPI (-0.10%). This is true even when considering costs and benefits on industries as well as consumers. Industries that experienced the greatest decline in output were transport, construction, and gold. Provinces which are closer to Gauteng, and have a greater share of severely impacted industries, experienced larger GDP and real income reductions. Mpumalanga’s decrease in GDP was 17% greater than Gauteng’s.

Suggested Citation

  • Francois J. Stofberg & Jan H. van Heerden, 2015. "The Short Term Economic Impact of Levying E-Tolls on Industries," Working Papers 201527, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201527
    as

    Download full text from publisher

    File URL: http://www.up.ac.za/media/shared/61/WP/wp_2015_27.zp54035.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eduardo Haddad & Geoffrey Hewings, 2004. "Transportation Costs, Increasing Returns and Regional Growth: An Interregional CGE Analysis," ERSA conference papers ersa04p461, European Regional Science Association.
    2. Das, Gouranga G. & Alavalapati, Janaki R. R. & Carter, Douglas R. & Tsigas, Marinos E., 2005. "Regional impacts of environmental regulations and technical change in the US forestry sector: a multiregional CGE analysis," Forest Policy and Economics, Elsevier, vol. 7(1), pages 25-38, January.
    3. Steininger, Karl W. & Friedl, Birgit & Gebetsroither, Brigitte, 2007. "Sustainability impacts of car road pricing: A computable general equilibrium analysis for Austria," Ecological Economics, Elsevier, vol. 63(1), pages 59-69, June.
    4. Latorre, María C. & Bajo-Rubio, Oscar & Gómez-Plana, Antonio G., 2009. "The effects of multinationals on host economies: A CGE approach," Economic Modelling, Elsevier, vol. 26(5), pages 851-864, September.
    5. Ishiguro, Kazuhiko & Inamura, Hajime, 2005. "Identification and Elimination of Barriers in the Operations and Management of Maritime Transportation," Research in Transportation Economics, Elsevier, vol. 13(1), pages 337-368, January.
    6. Mark Horridge & Glyn Wittwer, 2007. "The economic impacts of a construction project, using SinoTERM, a multi-regional CGE model of China," Centre of Policy Studies/IMPACT Centre Working Papers g-164, Victoria University, Centre of Policy Studies/IMPACT Centre.
    7. Wittwer, Glyn & Horridge, Mark, 2007. "CGE modelling of the resources boom in Indonesia and Australia using TERM," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 10433, Australian Agricultural and Resource Economics Society.
    8. Roberta Capello & Peter Nijkamp (ed.), 2009. "Handbook of Regional Growth and Development Theories," Books, Edward Elgar Publishing, number 12874.
    9. Domingues, Edson P. & Haddad, Eduardo A. & Hewings, Geoffrey, 2008. "Sensitivity analysis in applied general equilibrium models: An empirical assessment for MERCOSUR free trade areas agreements," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 287-306, May.
    10. Ueda, Takayuki & Koike, Atsushi & Yamaguchi, Katsuhiro & Tsuchiya, Kazuyuki, 2005. "Spatial Benefit Incidence Analysis of Airport Capacity Expansion: Application of SCGE Model to the Haneda Project," Research in Transportation Economics, Elsevier, vol. 13(1), pages 165-196, January.
    11. Mark Horridge, 2011. "The TERM model and its data base," Centre of Policy Studies/IMPACT Centre Working Papers g-219, Victoria University, Centre of Policy Studies/IMPACT Centre.
    12. Hiroshi SAKAMOTO, 2012. "CGE Analysis of Transportation Cost and Regional Economy: East Asia and Northern Kyushu," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 121-140, June.
    13. Horridge, Mark & Madden, John & Wittwer, Glyn, 2005. "The impact of the 2002-2003 drought on Australia," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 285-308, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francois J. Stofberg & Jan H. van Heerden & Heinrich R. Bohlmann, 2020. "A Fiscus for Better Economic and Social Development in South Africa," Working Papers 202072, University of Pretoria, Department of Economics.
    2. Stofberg, F.J. & van Heerden, J.H. & Horridge, M. & Roos, L., 2022. "A fiscus for better economic and social development in South Africa," Conference papers 333392, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francois Jacobus Stofberg & Jan Van Heerden, 2016. "The Short-Term Economic Impact of Levying E-Tolls on Industries," South African Journal of Economics, Economic Society of South Africa, vol. 84(4), pages 574-593, December.
    2. Sakamoto, Hiroshi, 2013. "Study of Regional Disparity in Indonesia Using a Multi-region CGE Model," AGI Working Paper Series 2013-01, Asian Growth Research Institute.
    3. Hiroshi SAKAMOTO, 2012. "CGE Analysis of Transportation Cost and Regional Economy: East Asia and Northern Kyushu," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 121-140, June.
    4. Hiroshi Sakamoto, 2011. "CGE Analysis of Regional Policy in Northern Kyushu Area," ERSA conference papers ersa10p383, European Regional Science Association.
    5. Robson, Edward N. & Wijayaratna, Kasun P. & Dixit, Vinayak V., 2018. "A review of computable general equilibrium models for transport and their applications in appraisal," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 31-53.
    6. Diniz, Tiago & Ferreira-Filho, Joaquim Bento & Horridge, Mark, 2018. "Economic and regional impacts of investments in electricity generation in Brazil," Conference papers 332933, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Viktor Pirmana & Armida Alisjahbana & Irlan Adiyatma Rum, 2015. "Boosting National Infrastructure Investment in West Java: An Analysis Using TERM CGE Model," Working Papers in Economics and Development Studies (WoPEDS) 201507, Department of Economics, Padjadjaran University, revised Dec 2015.
    8. Sebestyén, Tamás, 2017. "Moving beyond the iceberg model: The role of trade relations in endogenizing transportation costs in computable general equilibrium models," Economic Modelling, Elsevier, vol. 67(C), pages 159-174.
    9. Giesecke, James A. & Madden, John R., 2013. "Regional Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 379-475, Elsevier.
    10. Tran, Nhi & Roos, Louise & Giesecke, James & Madden, John, 2015. "Regionally targeted migration policy as an instrument for regional development: a general equilibrium assessment," Conference papers 332608, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Rokicki, Bartlomiej & Stępniak, Marcin, 2018. "Major transport infrastructure investment and regional economic development – An accessibility-based approach," Journal of Transport Geography, Elsevier, vol. 72(C), pages 36-49.
    12. Siemiński, Paweł & Hadyński, Jakub & Poczta, Walenty, 2020. "Diversification Of Human Capital Resources In Rural And Urban Areas In Poland," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2020(1).
    13. Masato Yamazaki & Atsushi Koike & Yoshinori Sone, 2018. "A Heuristic Approach to the Estimation of Key Parameters for a Monthly, Recursive, Dynamic CGE Model," Economics of Disasters and Climate Change, Springer, vol. 2(3), pages 283-301, October.
    14. Bohlmann, H.R. & Horridge, J.M. & Inglesi-Lotz, R. & Roos, E.L. & Stander, L., 2019. "Regional employment and economic growth effects of South Africa’s transition to low-carbon energy supply mix," Energy Policy, Elsevier, vol. 128(C), pages 830-837.
    15. Freshwater, David, 2014. "Vulnerability and Resilience: Two Dimensions of Rurality," Staff Papers 174103, University of Kentucky, Department of Agricultural Economics.
    16. Manfred Walser & Roland Scherer, 2012. "How to Improve the Region’s Ability to Learn: A Micro-level Model on Regional Actor's Knowledge and (Informal) Learning Processes," Chapters, in: Knut Ingar Westeren (ed.), Foundations of the Knowledge Economy, chapter 9, Edward Elgar Publishing.
    17. Withey, P. & Lantz, V.A. & Ochuodho, T. & Patriquin, M.N. & Wilson, J. & Kennedy, M., 2018. "Economic impacts of conservation area strategies in Alberta, Canada: A CGE model analysis," Journal of Forest Economics, Elsevier, vol. 33(C), pages 33-40.
    18. Karima Kourtit, 2017. "Effective Clusters as Territorial Performance Engines in a Regional Development Strategy - A Triple-Layer DEA Assessment of the Aviation Valley in Poland," REGION, European Regional Science Association, vol. 4, pages 39-63.
    19. Christos Ap. LADIAS & Filipos RUXHO & Fernando Jos? Calado e Silva Nunes TEIXEIRA & Susana Soares Pinheiro Vieira PESCADA, 2023. "The Regional Economic Indicators And Economic Development Of Kosovo," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 73-83, June.
    20. Roberta Capello & Andrea Caragliu, 2021. "Regional growth and disparities in a post‐COVID Europe: A new normality scenario," Journal of Regional Science, Wiley Blackwell, vol. 61(4), pages 710-727, September.

    More about this item

    Keywords

    Computable General Equilibrium Models; Regional Economics; Policy Modelling; Transport Cost;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pre:wpaper:201527. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rangan Gupta (email available below). General contact details of provider: https://edirc.repec.org/data/decupza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.