Thesis (MBA)--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: This paper examines the price and income elasticity of demand for fuel products
in Malawi. The data have been disaggregated into various sectors, agriculture,
industry, construction, commercial transport, private motor vehicles and
household, in order to fully understand the nature and magnitude of elasticity for
each sector.
Two methods were used - the simple economic method and the correlation
coefficient method.
This research covers a period of 10 years from 1995 to 2004. This period has
been chosen in order to arrive at meaningful conclusions.
The results show that each sector responds to price and income changes
differently. The agricultural sector has been found to be inelastic to both price
and income both in the short and long term. This sector, however, is sensitive to
other factors like drought and currency depreciation.
The industrial sector has been found to be very sensitive to both price and
income changes both in the short and long term. The same trend has also been
established for the construction sector and the commercial transport sector.
In the private motor vehicle sector, petrol-powered private motor vehicles have
been found to be inelastic to price as well as income both in the short and long
term. The reason for this is lack of affordable alternative forms of transport. Tests
for diesel-powered vehicles show very elastic results.
The demand data may have been distorted by the fact that diesel demand for
other equipment than vehicles could not be identified and it has been assumed
that diesel bought at filling stations or reseller points is used by vehicles. There is
evidence that diesel is also used for maize mills and generators.
The household sector has been seen to be very sensitive to price and income
changes. The reason for this is availability of substitutes such as charcoal,
firewood and other forms of biomass fuel that are extensively used in rural areas.
Income sensitivity is purely due to the fact that people in rural areas earn low
income. The conclusions for the household sector are that first the government
should remove the paraffin subsidy as it is not achieving its intended results.
Secondly, the government should establish basic wages and also offer better
prices to the subsistence sector. / AFRIKAANSE OPSOMMING: Hierdie proefskrif ondersoek die elastisiteit van prys en inkomste in die aanvraag
na brandtstofprodukte in Malawi. Om die aard en omvang van die elastisiteit in
elke sektor ten volle te verstaan, is die data gedesegregeer in verskeie sektore,
naamlik landbou, nywerheid, die boubedryf, handelsvervoer, privaat
motorvoertuie en die huishoudelike sektor. Twee metodes is gebruik: die
eenvoudige ekonomiese metode en die korrelasie-koeffisient-metode.
Hierdie navorsing beslaan 'n tydperk van tien jaar vanaf 1995 tot 2004. Die
tydperk is gekies om sodoende betekenisvolle gevolgtrekkings te kan maak.
Die resultate dui aan dat die sektore verskillend op veranderings in prys en
inkomste reageer. Daar is bevind dat die landbousektor glad nie elasties is nie
wat betref prys sowel as inkomste, sowel op die kort- as langtermyn. Hierdie
sektor is egter sensitief vir ander faktore soos droogte en die depresiasie van die
geldeenheid.
Daar is bevind dat die nywerheidsektor baie sensitief is vir prys-, sowel as
inkomsteveranderings op die kort- en langtermyn. Dieselfde neiging is bevind vir
die bousektor en die handelsvervoersektor.
In die privaat motorsektor is bevind dat petrolaangedrewe motors nie elasties is
nie wat betref prys sowel as inkomste op die kort- sowel as langtermyn. Die rede
hiervoor is die gebrek aan bekostigbare alternatiewe vervoermiddels. Toetse vir
dieselaangedrewe motorvoertuie dui uiters elastiese resultate aan. Die data wat
betref aanvraag kon moontlik verkeerd voorgestel word as gevolg daarvan dat
die dieselaanvraag vir ander toerusting as voertuig nie geidentifiseer word nie.
Daar is veronderstel dat diesel wat by vulstasies en herverkooppunte gekoop is,
vir voertuie gebruik is. Daar is bewyse dat diesel ook vir mieliemeule en
kragopwekkers gebruik word.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/14901 |
| Date | 03 1900 |
| Creators | Kamkwamba, Dasford D. |
| Contributors | Roux, Andre, University of Stellenbosch. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : University of Stellenbosch |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Rights | University of Stellenbosch |
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