| 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. |