THE EFFECTS OF THE TOBACCO PRODUCTS CONTROL AMENDMENT ACT OF 1999 ON RESTAURANT REVENUES IN SOUTH AFRICA: A PANEL DATA APPROACH

Prior to the implementation of this legislation the restaurant industry lobbied that a full‐scale ban would severely hurt business. Their lobbying resulted in a restrictive restaurant smoking policy rather than a full‐scale ban. Nevertheless the industry argued that this would still severely hurt business citing international evidence in support. The objective of this paper is to investigate the change in restaurant revenues after the implementation of a public smoking ban in South Africa. We use a fixed effects panel model to explore the response of restaurant revenues to the imposition of the ban. Provincial data is used over the period 1995 to 2003 and VAT receipts are used as a proxy of restaurant turnover. We conclude that restrictive restaurant smoking policies have not had a negative effect on restaurant revenue, indicating that claims of countrywide restaurant business declines under such a policy are unwarranted.     

PURCHASING POWER PARITY IN AFRICAN COUNTRIES: EVIDENCE FROM PANEL SURADF TEST

This study reexamines the validity of long-run purchasing power parity (PPP) hypothesis using a battery of panel unit root tests for 11 developing countries in Africa over the period 1980-2007. Based on the conventional panel unit root tests, we found evidence that the monthly real exchange rates in these countries were mean reverting. By contrast, the series-specific unit root test proposed by Breuer et al. (SURADF) reveals that only six of the 11 RERs series were stationary using the US dollar as reference currency. Additionally, our results reveal that there is stronger evidence of the parity condition with the Rand-based rates than in the other currency-based rates like the US dollar or Euro. We conclude that PPP holds in some, but not all, of the African countries according to the SURADF tests.