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

Francois Stofberg and Jan van Heerden ()
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Francois Stofberg: Department of Economics, University of Pretoria
Jan van Heerden: Department of Economics, University of Pretoria

No 201527, Working Papers from University of Pretoria, Department of Economics

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.

Keywords: Computable General Equilibrium Models; Regional Economics; Policy Modelling; Transport Cost (search for similar items in EconPapers)
JEL-codes: C68 L91 R11 R48 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2015-05
New Economics Papers: this item is included in nep-ict, nep-tre and nep-ure
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