scholarly journals Producer Price Index ‐ September 2011

2011 ◽  
Vol 789 (1) ◽  
pp. 48-66
Keyword(s):  
Price Index ◽  
Producer Price ◽  
Producer Price Index

scholarly journals An Empirical Analysis Of The Interest Rate-Vehicle Purchase Decision Nexus In South Africa

2013 ◽  
Vol 12 (5) ◽  
pp. 477
Author(s):  
Joseph Chisasa ◽  
Winnie Dlamini
Keyword(s):  
South Africa ◽  
Interest Rate ◽  
Interest Rates ◽  
Household Income ◽  
Price Index ◽  
Series Data ◽  
Passenger Vehicle ◽  
Producer Price ◽  
Producer Price Index ◽  
Vehicle Purchase

The domestic passenger car market has witnessed substantial growth in South Africa. At the same time, bank repossessions and black-listing of defaulting borrowers have increased in sympathy. This paper empirically examines the link between interest rates and the borrowers decision to purchase a passenger vehicle in South Africa. We use monthly time series data of passenger vehicles purchased, household income, fuel prices, prime interest rates and producer price index for manufacturers from January 1995 to December 2011. With passenger vehicle unit purchases as the dependent variable, we obtain OLS estimates of the passenger vehicle purchase function. Results show that there is a negative, but insignificant, relationship between interest rates and passenger vehicle purchases in South Africa. Holding other factors constant, a 1% increase in interest rate results in a 0.9% decrease in passenger vehicle purchases. Household income, fuel price and producer price index are observed to have a positive and insignificant impact on the decision to purchase a passenger vehicle. Our results have policy and decision making implications to lenders and borrowers, respectively.

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