3.

SAMPLE, SAMPLING METHODOLOGY

3.1. Construction Companies

The sample was developed by stages in the following sequence:

• Construction companies were classified by employment size from smallest to largest:
1. micro-sized construction companies with 0-5 employees,
2. small construction companies with 6-25 employees,
3. medium-sized construction companies with 26-50 employees,
4. large construction companies with 51+ employees.
The micro-sized companies with 0-5 employees were excluded from the sample, as they
represent only a very small proportion of construction output. The large companies with 51 and
more employees were re-amalgamated in the following way:
companies with 51-100 employees,
companies with 101-200 employees,
companies with 201 and more employees.

• The random sample was developed by the Neyman formula from the total
population determining sample step and sample size
• 117 construction companies were selected for the survey.
• 30 companies were selected as reserves.
Out of these 620 registered construction companies in RA (including 357 companies with 6
and more employees), which are specialized and conduct construction work, 117 companies
were selected by the sampling method in the survey to observe construction work, prices for
their components and building materials.

3.2 . Trade companies selling building materials

• Those were classified as by the wholesale and retail trade companies.

• There are 40 companies engaged in wholesale trade of construction materials, 10 of
which were not active in 2005 and were excluded from the survey. All of the other
30 companies have been included in the observation, as they in all probability were
ones from which construction companies usually make wholesale purchase.
• The other trade companies were classified by number of employees and 2005
turnover volume.

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 • Those companies, which had annual turnover below 10 million drams, were
excluded from the observation as they only account for a small proportion of sales.
• 82 companies with turnover more than 10 million drams and 30 companies engaged
in wholesale trade of construction materials were included in the sample.
Out of 295 registered and actually active trade companies in RA, which are specialized and
engaged in sell of building materials, 112 companies were selected by the sampling method in
the survey to observe prices for building materials.

3.3. Freight Transport Companies

Since there are only 29 registered and active freight transport companies, it was decided to
conduct exhaustive survey through observing all of those companies rendering such paid
services.
The table below shows (Table 1) the total number of active construction, trade and freight
transport companies and number and distribution of the companies selected by the sampling
method in the survey by RA marzes:

Table 1
Marz Number of selected companies
Total construction, trade, including
freight transport companies Construction companies Trade companies Freight transport companies
Total Selected in Total Selected in Total Selected in Total Selected in
the sample the sample the sample the sample

Yerevan 671 155 443 67 211 71 17 17

Aragatsotn 7 5 5 3 2 2 - -
Ararat 30 11 17 6 9 1 4 4
Armavir 10 8 5 4 3 2 2 2
Gegharkunik 19 11 11 4 8 7 - -
Lori 44 10 30 5 13 4 1 1
Kotayk 36 13 24 5 10 6 2 2
Shirak 52 16 27 4 22 9 3 3
Syunik 26 10 22 6 4 4 - -
Vayots Dzor 11 9 7 5 4 4 - -
Tavush 38 10 29 8 9 2 - -
Total, RA 944 258 620 117 295 112 29 29

The micro-sized companies of 0-5 employees were excluded from the sample as advised by
the EU expert. The two largest companies with more than 300 employees were not initially
covered by the automatic sampling by the NSS due to technical difficulties with the sampling
formula. However, as advised by the EU advisor, information has been captured manually for
these companies using official statistical data and included in the survey results for grossing
purposes.

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 Distribution of the construction companies included (surveyed) in the sample by
number of employees
Table 2
Construction companies by Total number of construction Number of companies
number of employees companies selected for the survey
0-5 * 0 0
6-25 241 52
26-50 52 15
51-100 35 24
101-200 21 14
201+ 8 6
Total 357 111
*) 249 micro-sized companies with 0-5 employees were excluded from the sample due to small
construction work volume.

The difference between initial sample and general population is that 14 construction
companies of varying size have been discovered to be inactive for one year in terms of turnover,
and those companies, who refused to answer, were substituted for other companies (111
companies were actually surveyed instead of initially selected 117 companies), so topping up of
the sample to ensure a good representation across the regions (Marz) of Armenia.