1. INTRODUCTION TO RESEARCH METHODS IN ECONOMICS Topic 3 Research Design Part I: Clarifying the Question 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/

2. Topic Outline ● The Research Problem ● Subproblems ● Literature Review ● Research Hypotheses ● Delimitations

3. The Research Topic and The Research Problem ● Research problem should be in the form of a question of not much more than a sentence – “The Labor Supply of Street Vendors” might become “What is the relationship between the income opportunities of street vendors and the number of people who work as vendors?”

4. The Research Topic and The Research Problem ● Research problem should be in the form of a question of not much more than a sentence – “Effects of Recent Ethiopian Tarriff Policies” might become “What kinds of policies has Ethiopia pursued recently with respect to trade tarriffs, and what effect have those policies had on the volume and nature of trade, and on economic output?”

5. The Research Topic and The Research Problem ● The question should be as complete and as precise as possible – “The Labor Supply of Street Vendors” should NOT become “How do street vendors supply their labor?” ● This question does not have a definitive answer ● This question could mean many things

6. The Research Topic and The Research Problem ● The question should be as complete and as precise as possible – “Effects of Recent Ethiopian Tarriff Policies” should NOT become “What have recent tarriff policies done to the Ethiopian economy?” ● This question does not have a definitive answer ● This question could mean many things

7. The Research Topic and The Research Problem ● The question should be self-contained – “Why has Ethiopian Education Failed?” begs other questions: ● How is the researcher measuring failure? ● Why does the researcher think education has failed?

8. The Research Topic and The Research Problem ● The question should not overstate the scope of the problem – “Are Ethiopian Hardware Stores Competitive?” is a bit unweildy, especially if you mean “How did hardware stores in Mercato respond to a drop in import tarriffs, and is their behavior consistent with the theory of perfect competition?”

9. Sub-Problems ● Often a question consists of several parts, or cannot be answered in one stage ● We wish to tackle the problem in several phases, each of which considers a question with a clear answer ● Sub-problems should be small in number, say, two to six ● It may help to divide the research question into clauses

10. Sub-Problems ● Example: “What is the relationship between the income opportunities of street vendors and the number of people interested who work as vendors?” – What are the income opportunities of street vendors, and how do they vary? – How many people work as street vendors, and how does this number vary? – What is the relationship between the two quantities above?

11. Sub-Problems ● Example: “What kinds of policies has Ethiopia pursued recently with respect to trade tarriffs? What effect have they had on the volume and nature of trade, and on economic output?” – What kinds of policies has Ethiopia pursued recently with respect to trade tarriffs? – What is the volume and nature of trade, and how has it changed? – Can we link those changes to changes in tarriff policies?

12. Sub-Problems ● What sub-problems should be: – Each should be completely researchable by itself – Answering sub-problems should give us new knowledge, however inconsequential – Each should be clearly tied to an interpretation of the data – The sub-problems should add up to the problem

13. Sub-Poblems ● What sub-problems should NOT be: – Sub-problems are not tasks ● “How should I collect my data?” is not a sub-problem; it is part of the research design – Sub-problems are not sub-sub-problems ● “How can we accurately measure a response about working hours?” ● “How can we get an honest response”...are genuine research problems but are a small part of the picture

14. Literature Review ● You need to be sure that your question has not been answered elsewhere ● You need to know what other people have said about similar topics. This will help you gauge and justify interest in your own ● You usually need background information about the topic

15. Literature review ● There are other benefits: – You can learn how other people faced methodological and theoretical issues similar to your own – You can learn about sources of data that you might not have known of – You can learn about other people tackling similar problems

16. Literature Review ● General information: Google, etc. ● Books: Library, amazon.com ● Articles: – JSTOR: www.jstor.orgwww.jstor.org – EconLit – ideas.repec.org – Business Premiere – Professors' Web Pages

17. Literature Review ● Structuring the review: – Summarize every article briefly; a sentence or two will do – Interpret the article in light of its relevance to your own study; you don't have to give the same meaning that the authors do – Critique it if necessary – Show the stock of knowledge building up over the course of the literature

18. ● Structuring the review: – Show the store of knowledge building up over the course of the literature – Show how your research topic adds naturally to this store of knowledge Literature Review

19. Research Hypotheses ● A hypothesis is a tentative answer to a research question ● It should be guided by the current state of knowledge about the issue ● It should be an answer that can be confirmed or refuted by data ● Each hypothesis should roughly correspond to a sub-problem

20. Research Hypotheses ● Example: “What is the relationship between the income opportunities of street vendors and the number of people interested in working as vendors?” – What are the income opportunities of street vendors, and how do they vary? ● HYPOTHESIS: THEY VARY BY THE GOODS SOLD, BY EXPERIENCE, BY SEASON, BY WEATHER

21. ● Example: “What is the relationship between the income opportunities of street vendors and the number of people interested in working as vendors?” – How many people work as street vendors, and how does this number vary? ● HYPOTHESIS: PEOPLE BECOME STREET VENDORS WHEN THEY LEAVE SCHOOL, MOVE TO THE CITY, OR WHEN THE INCOME RISES RELATIVE TO OTHER OCCUPATIONS Research Hypotheses

22. ● Example: “What is the relationship between the income opportunities of street vendors and the number of people interested in working as vendors?” – What is the relationship between the two quantities above? ● HYPOTHESIS: THE NUMBER OF STREET VENDORS RISES WHEN THEIR INCOME GOES UP

23. Delimitations ● A research project must be clear about its scope – Geographical limitations ● The study might only focus on Oromia, even though the question pertains to all of Ethiopia – Limitations by industry or occupation ● The study might only be able to capture registered firms even though there is a large informal sector in the industry – Limitations by subject matter ● The lives and behavior of street vendors may be interesting. But if we are only studying their supply behavior, say so.

24. Delimitations ● A research project must be clear about its scope ● If the limitations are not clearly spelled out, a reviewer might think the project is infeasible ● The researcher also must know that many interesting questions may arise that are outside of the scope of the study