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INTRODUCTION TO RESEARCH METHODS IN ECONOMICS Topic 4 Research Design Part II: Getting the Answer These slides are copyright © 2010 by Tavis Barr. This work is licensed under a Creative Commons Attribution- ShareAlike 3.0 Unported License. See http://creativecommons.org/licenses/by-sa/3.0/ for further information.http://creativecommons.org/licenses/by-sa/3.0/
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Topic Outline ● General Criteria for Research Design ● Choosing an Approach ● Deciding on a Data Collection Strategy ● Formulating a Budget ● Defining Assumptions
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Research Design: General Criteria ● Process should be universal: Any competent researcher should be able to carry it out – The research question is bigger than the researcher; the researcher is merely a catalyst – The beliefs and prejudices of the researcher should not affect the end results
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Research Design: General Criteria ● Process should be universal: Any competent researcher should be able to carry it out – Counterexample: ● I am studying behavior of non-governmental organizations. ● I believe it is driven by donor needs. ● I ask only questions about donor needs.
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Research Design: General Criteria ● Results should be repeatable by any other researcher who collects the data under the same circumstances and using the same parameters as specified in the research proposal – Results that are not repeatable do not answer the question universally
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● Results should be repeatable by any other researcher who collects the data under the same circumstances and using the same parameters as specified in the research proposal – Counterexample: ● I am studying the relationship between study habits of students and exam performance. ● I ask all my friends detailed questions about their study habits, and find out their exam scores at the end of the semester. Research Design: General Criteria
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● Controls should be specified and implemented as extensively as possible – Research is only repeatable if the circumstances are known and repeated exactly – Circumstances must be given to future researchers to allow for replication
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● Controls should be specified and implemented as extensively as possible – Counterexample: ● I am studying the relationship between the organization of trucking companies and their profitability ● I only study formally registered enterprises, because their income accounts are more reliable ● I neglect to mention this last fact to anyone Research Design: General Criteria
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● Outcome of observations should be measurable in an objective way – Counterexample: I am studying whether worker- management cooperation schemes leave workers more satisfied ● I study one plant that implements a scheme and one that does not ● I ask workers, “On a scale of 1 to 5, how satisfied are you with your job?”
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● The criteria for measurement should be specified – Counterexample: I am studying whether larger firms pay more than small firms ● I survey workers and ask them their hourly income ● I also ask them, “Is your firm small, medium, or large?” Research Design: General Criteria
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Choosing an Approach Quantitative Qualitative The phenomenon studied isObjective Socially constructed Your research question isPredictive Exploratory The relevant literature isLarge Limited Your desire for structure isHighLow ● Generally, economists do quantitative research ● You can do something qualitative if you justify it ● You can also conduct an experiment if it's feasible
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Choosing an Approach Quantitative Qualitative The phenomenon studied isObjective Socially constructed Your research question isPredictive Exploratory The relevant literature isLarge Limited Your desire for structure isHighLow ● Examples: – You want to study firm organization in the commercial farming sector – You want to compare the changes in income inequality within different states
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● The data should be collected in a way that is repeatable – For primary data, controls should be specified, as should criteria for admissibility (i.e., which data pass controls) – Example: ● We want to test whether the Commercial Bank of Ethiopia lends money to more poor people than private lenders. Which lenders should we include? Data Collection Strategies
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● The data should be collected in a way that is repeatable – For secondary data, it should be specified which observations will be used and how (this will be refined later on in the process) – Example: ● You want to test whether having a high school diploma increases your earnings, and by how much ● You have a random sample of 2,000 Ethiopians ● Which observations do you include in your sample?
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Data Collection Strategies ● The data should be sufficient to test the hypotheses – For primary data: Are you asking the necessary questions of the necessary people? – Example: ● You want to test whether people with more social contacts spend less time unemployed. ● What questions do you ask, and of whom?
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Data Collection Strategies ● The data should be sufficient to test the hypotheses – For secondary data: What do the answers look like? Are they in a form that is sufficiently precise to answer your question? ● You want to test the relationship between hospital availability and infant mortality by state. ● What data do you need?
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Data Collection Strategies ● Collection of the data should be feasible – For secondary data: ● Is the owner of the data making them available to you? ● Is it free of charge? If not, how will you pay? ● Are the data in a format that you can work with?
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Data Collection Strategies ● Collection of the data should be feasible – For primary data: ● How will you find your subjects? ● Will they be willling to participate? ● Time budget: Finding subjects, interviewing, inputting data ● Monetary budget: Finding subjects, questionnaire, inputting data
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Formuating a Budget ● For both primary and secondary: Expenses for analyzing data ● Example: ItemCost Computer time400 Printouts (100 pp)100 Flash drive300
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Formuating a Budget ● For primary data: Expenses for conducting interviews, per interview ● Example: ItemUnit Cost Total for 100 ints 1 hr interviewer5 500 Questionnaire2 200 Transport3 300 Total10 1000
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Formuating a Budget ● You should formulate a time budget, especially if you are doing interviews yourself ● Example: – Conducting 100 interviews: 100 hours – Inputting data: 20 hours – Analyzing data: 30 hours – Writing report: 20 hours ● You should put your time budget into a calendar
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Defining Assumptions ● Without assumptions there are no conclusions ● Some assumptions are obvious; some are reasonable but not obvious
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● Some are reasonable but not obvious ● Example: Suppose we wish to measure the return to education among bank employees in Addis Ababa – Assume that our measure of education is accurate – Assume our measure of income is accurate – Assume employees choose their level of education – Assume our sample is representative (more on representative samples later) Defining Assumptions
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● Some are reasonable but not obvious ● Example: Suppose we wish to measure the effect of cell phone availability on a village's economic output – Assume that our measure of economic output is accurate – Assume we know what the village's economic output would be like without cell phones
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