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Course Mathematical Methods for Economics I
Institution University of Delhi
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Lecture-1 Research Methods: An Introduction 1.1

Introduction:

Research is composed of two words re and search, which means to search again or to search for new facts or to modify older ones in any branch of knowledge. The Webster’s International Dictionary proposes a very inclusive definition of research as: A careful critical inquiry or examination in seeking facts or principles diligent investigations in order to ascertain something. Research provides an analytical framework for the subject matter of investigations. It establishes the relationship between different variables, especially the relationship of independent variable with dependent variables. The cause- effect relationship between different variables can also be identified, leading to valuable inference and generalizations. Research should never be treated as a piece of compilation work. By reading a number of books and compiling their materials is yet another book but this is no research. Research is always expected to be something original or a piece of work that advances some knowledge. Researcher must be clear in his mind as to what he is looking for. The domain of the research problems must be well defined. Those research investigations whose operational domain is not specific always remain inconclusive. It is always advised to select a smaller area of investigation and study more intensively and research must be based on facts. The modern concept of research is, therefore, broad-based and provides for well meaningful investigations into any field of academic. RESEARCH? Before we proceed further let us know what Research is? “A research is a careful study or investigation of existing facts in order to discover new realities”

“Research is sufficiently objective and systematic to make possible classification, generalization and verification of the data observed” Lundberg.

“It is essentially a systematic inquiry seeking facts through objective verifiable methods in order to discover the relationship among them, and to deduce from them broad principles or laws” Gopal 1

“Research is a systematic and refined technique of thinking, employing specialized tools, instruments and procedures in order to obtain more adequate solution of a problem than would be possible means. It starts with a problem, collects data or facts, analyses them critically and reaches decision based on the actual evidence” Crawford. In fact research is treated as advancement in knowledge acquired through scientific methods. It is usually, carried out by learning a lesson from past research conducted. Induction and deduction are also possible in systematic research. INDUCTION AND DEDUCTION PROCESS OF RESEARCH Induction is a process of inferring a general law from a particular instance, i.e., A generalization is arrived at on the basis of the observation or result of particular instance. For examples: 1. 2. 3. 4.

Ahmad’s territory does not have the market potential of other territories. Ahmad’s sales-making skills are so poorly developed that he is not able to close sales effectively. Ahmad’s territory has been the scene of intense price cutting by local manufacturers, and this has caused him to lose many sales. Some types of people just cannot sell boxes, and Ahmad is one of these people.

Deduction, on the other hand, is a way of making a particular inference from a generalization. For examples (Premise 1) All regular employees can be trusted not to steal. (Premise 2) Ahmad is a regular employee. (Conclusion) Ahmad can be trusted not to steal. and (Premise 1)

Inner city household interviewing is especially difficult and

(Premise 2)

expensive. This survey involves substantial inner city household

(Conclusion)

interviewing. The interviewing in this survey will be especially difficult and expensive.

1.2

Categories of Research:

Basically the research may be divided into two main categories: 2

(i) (ii)

Qualitative Research Quantitative Research

There are two concepts of these two types of research. (i)

Qualitative Research (Intensive) The qualitative research, as clear from the name, is concerned with qualitative aspects of a phenomenon of interest. In this research qualitative information are used usually gathered using Nominal and Ordinal Scales (to be discussed later). The other way of defining qualitative Research is that it involves a smaller number of individuals within a longer time span.

(ii)

Quantitative Research (Extensive) In quantitative research we study or investigate the facts using quantitative type of information. This information is extracted from data collected using high level scales of measurements, such as, Interval and Ratio Scales (to be discussed Later). The other concept is that quantitative research involves a larger number of respondents within a relatively brief time span.

1.3

Criteria for a Good Research Problem

Though there are no standard rules to guarantee the suitability of research problem but a number of criteria in the form of conditions might be known for guidance in the selection of the topic. Some conditions are mentioned here for guidance. (1)

Originality It should not involve objectionable duplication. Though originality is a basic condition and it is a credit point for any research, yet it does not mean that a problem studied in the past cannot be undertaken again. There is a constant need for the verification of the findings of previous investigations.

(2)

Importance How important is your project? No research project should be undertaken if one feels that it would not add any significance findings and improvement in the area.

(3)

Aim of Research 3

The aim of the research also influences the selection of the problem. If it a producer research, the problem will be studied to enhance existing knowledge for its own sake. If it is a consumer type, the result should be suitable for immediate application. (4)

Level of the research Level of research is another criterion to help in the selection of a problem. Is it an academic or business type research?

(5)

(6)

Interesting This problem should be interesting for the investigators and his interest should be intellectual not for any personal benefit. A major reason for the encouragement of the investigator is to choose his own research problem in which his interest should be involved. Experience Good research problems stem from a clear understanding of a theoretical, empirical and practical aspects of the subject derived from personal experience and from a thorough review of the literature. Conversely lack of familiarity, with the subject is almost sure to result in a poor choice. The investigator should possess the required competence, knowledge and skill to handle the project.

(7)

Availability of Data (information) and Co-operation: If it is an applied research, the researcher should ensure the availability of valid and reliable data-gathering devices and procedures. No investigator is in a position to handle the study independently. He needs a group to work for him in planning, collection and analysis of data.

(8)

Availability of Guidance Guidance in research is very important. Is there any qualified persons or guide in the field you are interested? You need help from the persons who are involved in that business in which you are conducting your research. One cannot see the insight of the problem independently.

1.4

Research Design Three steps are to be noted in Research design.

1. 2. 3.

What is a research design? Basic issue of a research design. Component of a research design.

1.4.1 What is a Research Design? 4

Research design is always necessary before the research is conducted. A research design is a basic plan that guides the type of information to be collected, the source of data, and phase of analysis of the research project. A good design will make sure that information collected is consistent with the study objective and data are collected by accurate and economical way. Every design has its own merits and demerits but a good research design should satisfy the following four conditions.

(i) Objectivity This relates to planning, sampling design, data collection, analysis and interpretation of the statistical data. The questionnaire should be framed in such a way so that no ambiguity should be faced either to the investigator or to the respondents. (ii)

Validity

Any measuring instrument should measure what it is supposed to measure. (Example) Any questionnaire constructed for measuring intelligence should measure only intelligence and nothing else. (Validity will be discuss later on).

(iii) Reliability Reliability refers to stability and consistency of the collected data. This is very important part in any research design (reliability will be discussed in details later on).

(iv) Generalization The planning of research should be made in such a way that the results of the finding should be generally applicable. This is only possible if it has appropriate design related to the problem. This also requires that the selection procedure and statistical techniques of the data analysis must be appropriate. Basic Issues of a Research Design

There are three basic issues of a research design: (i)

Type of investigations (a) Causal When the researcher wants to describe the cause of the problem, then the 5

study is called a causal study. For example the fear of earth -quake predicted in some area was an instrumental in obtaining insurance. Does smoking cause cancer is an other example of causal study.

(b) Non-causal (Correlational study) When the researcher is interested in describing the important variables that are associated with the problem then it is known as Non-causal or Correlational study. Are smoking, drinking and chewing tobacco associated with cancer? The real state business will be influenced by the prediction of an earthquake are examples of Correlational study.

(ii)

Purpose of the Study

(a)

Exploratory

An exploratory study is undertaken when we do not know much about the situation at hand, or when we have no information on how similar problems or research issues have been solved in the past. In such cases extensive work needs to be done to gain familiarity with the phenomena relating to the situation i.e. A manager of a firm is interested whether the work ethic values of the employees of his firm are different in Pakistan than those of in Europe.

(b) Descriptive A descriptive study is undertaken in order to ascertain the characteristics of a variable in a certain situation. i.e. A bank manager wants to have a profile of the individuals who have loan payments outstanding. This information might help him to make decision regarding their cases. Other examples such as, description of organizations in the industry; a marketing manager might want to develop a pricing, sales distribution for his product; 30% workers are in favor of category A; employ over 50 years of age and less than 23 years are not interested in new saving scheme.

(c)

Hypothesis testing 6

(iii)

Studies that engage in hypothesis usually try to explain the nature of certain relationship or establish the difference or independence among groups between two or more factors, i.e. A marketing manager would like to know if the sales of the company will increase if he doubles the advertisement. Here the manager wants to know the nature of relationship between sale and advertisement, or more men then women are unbelievers, or working in the night shift (as opposed to the day shift) is associated to whether or not one is married. More women than men are interested in having more children Study Setting

There are two types of study setting (i) contrived and (ii) non-contrived. (a)

Non-contrived Study Setting When the study is conducted in natural environments, where events normally occur, are non-contrived settings. Correlational studies are conducted in non-contrived settings. A bank manager would like to detect the cause effect relationship between interest rate and saving inclinations of clients.

(b) Contrived study setting When the researcher is conducting research under artificial setting then it is known as contrived setting. Usually causal studies are done in contrived laboratory settings.

(iv) Time horizon Cross Sectional Versus Longitudinal (follow up) studies are the examples of time horizon study. In cross sectional study data are collected at one time whereas in longitudinal study, data are collected over a period of time.

7

(3)

Components of a Research Design

Any investigator, before getting on to the job of planning a research design for a proposed study, should be clear about the following aspects: What to observe? Whom to observe? How to observe? Why to observe? How to record the observation? How to analyze the observation? What inferences can be drawn? Once the investigator has sufficient understanding about the abovementioned aspects, he/she can report to the job of planning a research design. In doing so he proceeds step by step in the following order: (i)

Title of the Investigation or research The title of any research project should be: as brief as possible. as precise as possible. Should be in generalized terms.

(ii)

Purpose of the Study A brief mention of the importance of the area of research in the present context of social life should be attempted highlighting the main purpose that prompted the investigator to take up the recent study.

(iii)

Critical Study of the Previous Research Instead of only reviewing previous studies for the sake of doing it; critical approach of previous studies is more meaningful and useful by doing so he may be able to: know about the different areas covered by various researchers in the field of investigation in which the investigator is interested. get acquainted with the different meanings given to certain concepts and the usage of different concepts in various studies. concentrate on the areas where little research has been carried out and to give less importance to the areas which have already been thoroughly investigated. look into different merits and shortcomings of the research designs followed in different studies with a purpose to retain the merits of 8

different studies and cover up the loopholes while designing the plan of research for the present study. verify the present findings with the previous findings while discussing the results of the present study. (iv)

Statement of the problem Once the investigator is able to collect different studies conducted in his field of investigation from various sources and examine each one of them critically, he will be in a position to state his problem in more precise manner.

(v)

Scope of the investigation The scope of any investigation is dependent on several factors such as the time and money available to the investigator, availability of the sample, accessibility of the investigator to the respondents, the amount of time the respondents can spare for the investigator etc.

(vi)

Objectives of the Study The investigator will spell out the objectives of the present study in the form of statements and while doing so, he takes care that the objectives mentioned are well within the scope of the investigation.

(vii)

Conceptualization of the Different Terms Used in the Investigation The research or should be clear about the meaning of every term he uses. It not only helps him but also the other investigators respondents and reader of the research report in understanding the different terms without any ambiguity.

(viii) Variables The variables are classified in several ways (will be discussed later on). (ix)

Formulation of Hypothesis A tentative solution suggested to a problem is called a hypothesis. McGuigan (1969) has defined hypothesis as a testable statement of a potential relationship between two (or more) variables (will be discussed later on).

(x)

Selection of the Sample It is needless to say that no investigator can study the entire population and hence selects a few individuals belonging to a population for the purpose of his investigation. These selected individuals form a sample

(xi)

Data Collection

9

The investigator should now find (questionnaire) for collecting the data needed by the hypotheses. Besides using the instruments, like questionnaires, interview schedules, projective techniques, attitude scales etc, the investigator may adopt other methods like observation, examination of records and so forth for data collection. Each of these various methods has its own advantages and limitations. There are three basic data collection approaches in business or market research. (a) Primary or survey data. (b) Secondary data. (a)

Primary Data

Primary data are colleted to solve immediately problem whereas secondary data are collected for some other purpose other than to solve problem at hand. Survey Research is a useful technique to collect primary data. These information’s are collected by various methods such as by telephone, through postal service, through personal interview etc. (b) Secondary Data

(xii)

Data collected from reports, sales invoice and accounting records are called secondary. This is known as internal secondary data. Data generated by sources outside the organization such as Govt. reports, trade associations is known as an external source. Testing the Reliability of Data Various approaches may be used in order to test the reliability of data (will be discussed later on).

(xiii) Tabulation of the Results Tabulation of the results in a meaningful way clears the way for data analysis. Each table should be given a suitable heading and followed by a discussion. Recently it has become a practice to give all the tables in a serial order towards the end.

(xiv) Analysis of the Data Complete planning of analysis in advance is not always possible new ideas occur to the investigator as he collects the data. The basic outlines of the

10

analysis should be chalked out depending on the nature of the data and the information required by the hypothesis. (xv)

Interpretation of the Results The results of an investigation are to be interpreted:

(xvi) Suggestions for further Research No research is an end in itself. The investigator should be able to give directions to the future researchers from the insights he has gained during the investigation.

(xvii) Summary of the Report The investigator should give a summary of the entire investigation briefly highlighting the findings of the present investigation and suggestions for the future research.

(xviii) Bibliography There are different ways of reporting the bibliography or references. The investigator can select any method he like but should follow the same procedure throughout. The following order is usually observed by a large number of investigators while reporting the reference. (i) Name of the author: the last name is given first and all the references will be arranged according to the alphabetic order of the second names. Some investigators arrange all the references according to the ascending order of years of publication. (ii) Year of publication: usually this follows the name of the author and is given within the parenthesis. S...


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