This paper empirically compares the contribution of the two major wealth accumulation factors - earned income and inheritances - to the net wealth position of households in the Eurozone. The elasticities of both wealth sources differ considerably across countries and are overly non-linear. Depending on the position in the wealth distribution, an increase of one percentile in the income distribution corresponds to 0.1-0.6 percentiles in the net wealth distribution. We find substantially stronger effects for inheritances vis-á-vis income. In Greece, Portugal, and Austria, households have to climb around three percentiles in the income distribution to compensate a one percentile increase in the inheritance distribution. The findings clearly suggest that bequests play a stronger role in wealth accumulation than earned income. / Series: INEQ Working Paper Series

South Africa is acknowledged as having the highest Gini coefficient in the world. The Gini coefficient is a measure of income inequality in a country. The eradication of all forms of inequality was probably the most important aspiration for people pre-democracy. After two decades of democracy, not only has the eradication of inequality not materialised, but inequality has worsened. The aim of the research is threefold. Firstly, to understand the origins and the ensuing reasons for inequality as it is experienced in South Africa in 2013 and secondly, to investigate what the effects of this inequality are on the lives of South Africans, socially, politically and economically. Lastly, the research aims to find what, if anything, South Africans can do to address the issue, in order to determine if the aspiration is indeed attainable. Qualitative exploratory research was conducted by interviewing 16 prominent South Africans with the requisite knowledge of the topic and experience in their respective fields. Semi-structured, in-depth face-to-face interviews were performed. Content and theme analysis were carried out on the transcripts, followed by the recording of the responses in logically ordered tables. The literature informed the interpretation of the results in the tables. The reasons for and causes of South Africa’s high Gini coefficient were identified, with the apartheid legacy and the present government’s governance style as the two greatest contributors. The effects of the high inequality in the South African context were considered far more detrimental to society, than to the politics and the economy of the country. The research yielded a number of actions that could be considered to reduce inequality, thereby improving the Gini coefficient. The two most important proposals were addressing the current poor education system and finding a solution for unemployment. / Dissertation (MBA)--University of Pretoria, 2013. / pagibs2014 / Gordon Institute of Business Science (GIBS) / MBA / Unrestricted

Philosophiae Doctor - PhD / Eritrea, a relatively young African nation, is one of the least developed countries in the world. Its economy is predominantly dependent on subsistence agriculture and the level and magnitude of poverty is more severe in rural areas. The formal financial sector is underdeveloped, state-owned, far from being competitive, and limited in terms of depth and breadth as measured by the relevant financial sector development indicators. To address the limitations of the formal banking sector and to help fill the financing gap, and improve the general livelihood of those at the lower income group, the Government of Eritrea introduced a Saving and Microcredit Programme (SMCP) in 1996 for which no scientific study measuring its impact has been done at the household level. The study was conducted in rural areas to find out whether the SMCP as a microfinance institution has improved the livelihood of its clients. The specific objectives of the study were to describe the characteristic feature of rural livelihoods in terms of the resources owned, the strategies pursued and outcomes achieved, identify and examine the determinants of household participation in the SMCP and finally assess the impact of participation in SMCP on household livelihoods. The study employed a quasi-experimental cross-sectional survey design involving structured and semi-structured questionnaire administered to 500 respondents of whom 200 represented the treated group and 300 the controlled group. Logit regression was employed to identify the factors that determine household participation in the SMCP. In regard to this, age of the client household, household size, marital status, level of education of the client household, the size of first round loan, entrepreneurial experience, type of loan product offered by the institution, ownership of livestock and microenterprise, the perception of the client on involuntary deposits, the occurrence of a negative events (shock) to the household and village access to electricity were found to have statistically significant effect on the household‟s probability to participate in the SMCP. Furthermore, the marginal effects were also computed to evaluate the contribution of each of these factors to the likelihood of participating in the SMCP. A propensity score matching model was applied to assess the impact of the programme on the livelihood of its clients. The findings reveal that participation in the SMCP has a significantly higher average treatment effect on the treated (ATT) households. Profits generated from off-farm and small microenterprises, the values of household and livestock assets, food and non-food consumption expenditures and nutrition quality, were found to be on average higher for the treated households than for the controlled households. Therefore, it could be argued that the provision of micro financial resources has significant positive effects on household livelihood outcomes. The study has important social and economic policy implication regarding the role of finance in rural development.

To gain empirical evidence of the nature of major household appliances’ performance failures, and of how dissatisfied consumers cognitively appraise product failure and their subsequent experiences in handling the negative event, the study explored by means of a survey the experiences of 200 female consumers in Gaborone, who had experienced dissatisfaction with any major household appliance within a prior four-year recall period. A convenience sampling technique was employed where pre-screened respondents completed a self-administered questionnaire. The results of the study show that respondents clearly differentiated their expectations concerning the functional and symbolic performance dimensions of their specific appliances. When linking the theory on perceived quality and expectancy disconfirmation, it was discovered that respondents’ expectations were disconfirmed due to the performance failure of their specific appliances. The performance failure was perceived in three distinct ways: functional performance failure, symbolic performance failure, and the combined functional and symbolic performance failure, rather than the usual, formal functional performance failure only. Very to extreme dissatisfaction were experienced and the product failure was appraised as stressful, leading to respondents feeling very to extremely stressed. The female respondents attributed blame for the poor performance of their major household appliance more to external sources like retailers/manufacturers than they internalised blame to themselves, the appliance or other people. They also believed that the party they held responsible for the poor performance could have prevented the problem. Due to the performance failure of their specific appliances, the respondents experienced various emotional responses (e.g. anger, shame, guilt, surprise, sadness and frustration) and of varying intensities. Significantly, more respondents felt very to extremely angry, sad, surprised or frustrated. Respondents did not experience high levels of shame and guilt. These emotions necessitated some coping strategies in the form of complaint actions. Respondents who felt very to extremely angry took formal complaint action (i.e. contacted the retailer to obtain redress). Respondents who experienced frustration significantly engaged more in problem-focused coping. Predominantly, female respondents engaged in problem-focused coping strategies that were confrontational and were aimed at external sources like retailers/manufacturers. Blame for the performance failure of appliances was directed more to retailers/manufacturers than to any other party like the self, other people or the appliance. Hence, a significant difference existed between the various coping strategies and attributing blame to the retailer/manufacturer, where respondents engaged more in problem-focused coping, than in any other coping strategies like emotion-focused or avoidance coping. These findings have both salient and practical implications especially in Botswana contenxt, which were pointed out to the retailers/manufacturers, educators, consumer protection organisations, policy makers and consumer scientists, to help consumers to function well in the marketplace. / Dissertation (MSc)--University of Pretoria, 2010. / Consumer Science / unrestricted

My dissertation consists of three essays. The central theme of these essays is the psychological factors and biases that affect the portfolio allocation decision. The first essay entitled, “Are women more risk-averse than men?” examines the gender difference in risk aversion as revealed by actual investment choices. Using a sample that controls for biases in the level of education and finance knowledge, there is evidence that when individuals have the same level of education, irrespective of their knowledge of finance, women are no more risk-averse than their male counterparts. However, the gender-risk aversion relation is also a function of age, income, wealth, marital status, race/ethnicity and the number of children in the household. The second essay entitled, “Can diversification be learned?” investigates if investors who have superior investment knowledge are more likely to actively seek diversification benefits and are less prone to allocation biases. Results of cross-sectional analyses suggest that knowledge of finance increases the likelihood that an investor will efficiently allocate his direct investments across the major asset classes; invest in foreign assets; and hold a diversified equity portfolio. However, there is no evidence that investors who are more financially sophisticated make superior allocation decisions in their retirement savings. The final essay entitled, “The demographics of non-participation”, examines the factors that affect the decision not to hold stocks. The results of probit regression models indicate that when individuals are highly educated, the decision to not participate in the stock market is less related to demographic factors. In particular, when individuals have attained at least a college degree and have advanced knowledge of finance, they are significantly more likely to invest in equities either directly or indirectly through mutual funds or their retirement savings. There is also evidence that the decision not to hold stocks is motivated by short-term market expectations and the most recent investment experience. The findings of these essays should increase the body of research that seeks to reconcile what investors actually do (positive theory) with what traditional theories of finance predict that investors should do (normative theory).

Strategies of rural development in China experienced sharp changes in the policies for rural economic reform which began in the late 1970s. Contrary to the previous model of a "pure" socialist way of development, which argued for a single developmental path, the reform policies encouraged diversification. Peasant adaptation to the new situation is examined through the co-existence of three kinds of households, namely subsistence cropping households, cash cropping households and partial agricultural households. The thesis attempts to determine the characteristics associated with the different kinds of households by analyzing survey data collected from five townships in the Pearl River Delta of south China. It also attempts to bring out some theoretical implications of the Chinese experiences of rural development in the past forty years. / Arts, Faculty of / Anthropology, Department of / Graduate

Les trois chapitres de cette thèse étudient les choix financiers des ménages au cours de leur vie. Le premier s’intéresse à la décision de devenir un entrepreneur, le second au choix d’investir en bourse et le troisième à la valeur des droits à la retraite.Dans le premier chapitre, j’utilise des données administratives françaises sur les entrepreneurs créateurs d’emplois pour estimer un modèle de cycle de vie dans lequel des individus averses au risque peuvent créer une entreprise et retourner vers l’emploi salarié. J’estime que les bénéfices inobservés de l’entrepreneuriat représentent 6 100 euros par an, soit 67 000 sur la durée de vie d’une entreprise. L’option de retourner vers le salariat vaut, quant à elle, 82 000 euros pour les nouveaux entrepreneurs.Dans le second chapitre, j’estime un modèle de choix de portefeuille qui prend en compte la relation entre les rendements du marché boursier et l’asymétrie des chocs idiosyncratique de revenue. La cyclicité de cette asymétrie peut expliquer pourquoi les ménages jeunes ou à la richesse modestes investissent peu en bourse, et pourquoi la part de leur richesse investie en action croit jusqu’à l’âge de la retraite.Dans le troisième chapitre, je calibre un modèle de choix de portefeuille dans lequel le marché du travail est celui des actions sont cointegrés. J’estime que l’équivalent certain des droits à la retraites pour les ménages salariés est de 46% inférieur à la somme des paiements annualisés au taux sans risque. Au niveau national, la valeur ajustée des droits à la retraite est de 19.6 trillions de dollars, soit 37% de moins que la valeur non-ajustée de 31 trillions. / The three chapters of this thesis study households’ financial decisions over the life-cycle. The first chapter focuses on the decision to become an entrepreneur, the second on the choice to invest in stock market and the third on the value of pension entitlements.In the first chapter, I use French administrative data on job-creating entrepreneurs to estimate a life-cycle model in which risk-averse individuals can start businesses and return to paid employment. I find that unobserved benefits represent 6,100 euros per year, summing up to 67,000 over the average entrepreneurial spell. The option to return to paid employment is worth 82,000 euros to new entrepreneurs.In the second chapter, I estimate a life-cycle model of portfolio choices that incorporates the relationship between stock market returns and the skewness of idiosyncratic income shocks. The cyclicality of skewness can explain low stock market participation among young households with modest financial wealth and why the equity share of participants slightly increases until retirement.In the third chapter, I calibrate a life-cycle model in which the stock and labor markets are cointegrated and Social Security benefits are wage-indexed. I find that the certainty equivalent of Social Security for working households is 46% lower than the sum of future cash flows discounted at the risk-free rate and negative for young households. At the national scale, the risk-adjusted value of Social Security entitlements is 19.6 trillion dollars, which is 37% lower than the unadjusted value of 31 trillion dollars.

Thesis (M.Sc. (Agricultural Economics)) -- University of Limpopo, 2015 / The role of agriculture in poverty alleviation in the rural areas has been acknowledged and supported in South Africa. In former homelands, households generate livelihoods from agriculture and agricultural related activities. However, in some areas, the role of agriculture in alleviating poverty has not been appreciated but instead households participate in off-farm activities more frequently. Bushbuckridge area in the Mpumalanga province is such an area with few households engaging in agriculture. The study aims to investigate the determinants of household participation in agricultural production in Shatale region of Bushbuckridge Local Municipality (BLM). The study had three objectives; the first objective was determine socio-economic factors influencing household labour participation in agricultural production, the second was to analyse socio-economic factors influencing the amount of time allocated to agricultural production and the third objective was to analyse household income diversification in Shatale region of BLM. Multi-stage sampling and stratified sampling approaches were used to collect primary data from 86 households in ward 7 and ward 13 in Shatale region of Bushbuckridge Local Municipality (BLM). The double-hurdle model which comprises a probit model and a truncated regression model was used to analyse the data on assumption that the decision to participate in agricultural production and the amount of time allocated are influenced by different factors. Income diversity was analysed using the Number of Income Sources (NIS) method. The results of the first hurdle showed that gender of the household head, highest level of education, occupation of the household head, access to irrigation water, access to extension service and farming experience negatively influenced household participation in agricultural production and age of the household head and land size positively influenced household participation in agricultural production. The results of the second hurdle showed marital status of the household head, infants and irrigation water negatively influenced the amount of time allocated in agricultural production. Land size and farming experience positively influenced the amount of time allocated in agricultural production. About 49% of the households’ diversified income into four sources and 18.6 percent diversified into on five sources on incomes which included farming, old age pension, child support grant, trading and remittances. There is a need of government intervention in Shatale region to encourage household participation in agricultural production. Government can intervene through provision of land for farming, capacitating farming households, infrastructural development, increasing extension support services to farming households and expansion of canal networks.

This dissertation is composed of three papers that shed light on the stock-market participation puzzle. The first article studies different aspects of the participation of Spanish households in the stock market. I start by analyzing the determinants of stockholding in a reduced form setting, quantifying the importance of different socioeconomic variables on the decision to hold stock. This is complemented by a comparison with US stocking-holding behavior, especially that of highly sophisticated households who might be expected to participate fully in the market. The second article develops and estimates a full consumption and portfolio-choice life-cycle model to help explain the behavior uncovered in the first article. This model includes a fixed cost for participation in the stock and produces empirically sensible simulations of households' stock-holding patterns by age. It shows the powerful effect that the fixed cost has in explaining the non-participation issue. Moreover, using data from Spanish households I estimate this fixed cost. The third article, co-authored with Michael Ehrmann, breaks away from classic models and delves into the importance of considering more behavioural or psychological issues to explain this puzzle. In particular, we look at the effect of past macroeconomic experiences on the households' portfolio choice and risk-taking behaviour. We find that the average stock market return experienced by a household through its life time has a significant effect on its decision to hold stock. Moreover, disastrous events such as stock market crashes remain in people's minds and deter them from investing for a long period after the event happened.

This paper verifies the positive relationship between consumer credit and the four categories of consumption spending in South Africa. The study utilised data sourced from the South African Reserve Bank for the period 1975-2011. The study was conducted via regression analysis to determine the relationship between the dependent and independent variables. A significant positive relationship was found between the independent variable household debt and the four categories of consumption. The results are statistically significant for non-durable and durable goods and although significant for services and semi-durable goods, the relationship is less strong in these two instances. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted