Proceedings of the 5th Economic & Finance Conference, Miami

PARATRANSIT MESOECONOMY: CONTROL MEASURES FROM THE SUPPLY SIDE?

OFENTSE MOKWENA

Abstract:

The South African Minibus Taxi industry has had to various degrees been affected by government intervention, in micro, and macroeconomic forms. Transporting on average 11.9% and 15% of education trips and 26.88% and 26.18% of working trips between 2003 and 2013 respectively, the minibus sector dominates the market second to walking (Statistics South Africa, 2014; 2003). Recent transport policies seem to discourage the dominance of private cars and minibus vehicles. Meanwhile, the Department of Trade and Industry has developed an incentive package for the production of minibus vehicles. In the microeconomy, transportation policy makers tend to focus on the travel market, whilst manufacturers focus on the demand for minibus vehicles. This study proposes and tests a framework to explore the extent to which travel and production microeconomic indicators relate to dynamic macroeconomic activity over time. This paper is an experimental exploration of statistical relationships between selected macroeconomic indicators (SMIs) and the national minibus economy measured in vehicle sales and prices. Sales data is sourced from the National Association of Automobile Manufacturers of South Africa (NAAMSA) and price data from a manufacture dominating the market. Firstly, are there statistically significant macroeconomic forces at play in the minibus economy? Secondly, do these SMIs relate to minibus sales data including sales price per seat, registered vehicle population, vehicle sales, market ejections per year and cumulative forms of this data? We investigate this through correlation (a) analysis of price data, (b) sales data, (c) vehicle population in the travel market and (d) SMI data between 2002 and 2011. This is a mesoeconomic study, bridging the policy gap between macroeconomics (i.e. CPI) and microeconomics (i.e. vehicle population in the travel market). Statistically significant relationships and path dependencies are revealed within the framework developed. Therefore mesoeconomic research in the transport economic sphere is significantly viable. One shortfall of the paper is that the microeconomic analysis is narrow because travel data and vehicle utilisation data is not included. Further quantitative research is required to inform a policy agenda that enables an understanding of macroeconomic forces (national and regional level) that filter through transport economic policy. This study lays a unique avenue to equip transit and automotive decision makers, industries and planners to better forge through changes in the macroeconomy in microeconomic contexts.

Keywords: paratransit, mesoeconomics, public transport production, industrial policy, minibus taxi

DOI: 10.20472/EFC.2016.005.019

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