An observational programme to monitor the optical variability of southern quasars has been established and operated at Mt. John University Observatory. This programme, which is the first in the southern hemisphere, involves systematic observations of a large sample (~130 sources) of both radio- and optically-selected quasars. Because the observations are all obtained with a 61 cm telescope, broad-band photographic photometry is necessary to allow an adequate sample of sources to be studied. Because the observations are broad-band, standard methods of photographic data reduction are unsuitable. A generalised technique of data reduction has therefore been developed, tested and applied. This technique allows the detection of luminosity variations in a source with an accuracy limited only by the detective quantum efficiency of the photographic plate. As a part of the application of the results of this programme to test the available source models, a generalised relation for the significance of inverse Compton scattering in an anisotropic source has been derived. The theory of incoherent synchrotron radiation in a source constrained by the inverse Compton scattering mechanism, has been applied to the source PKS 0537-441 to illustrate the application of this theory. The observational results obtained have been applied as a test of the available quasar models. The simplest forms of the multiple independent-event (supernovae) and the spinar-giant pulsar models have been shown to be inconsistent with observation. The most active sources observed are consistent with a model of a super massive black hole accreting mass at a rate determined by its Eddington luminosity