DMU, CBE, Department of Economics Research Methods for economists

Chapter One

1. Introduction

1.1. Definition of Research

Like many terminologies in economics literature, there is no single definition of research and many
scholars define research with respect to their views of different perspectives. Some of the definitions
of research include the following.

According to Clifford Woody research “comprises defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and
reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the
formulated hypothesis”.

Young also describes social research as “the systematic method of discovering new facts or verifying
old facts, their sequences in their relationship, causal explanation and the natural laws which govern
them”.

A research is an organized, systematic, data-based, critical and objective investigation of a specific

problem, undertaken with the purpose of finding answers or solutions to it. One can also define
research as a scientific and systematic search for pertinent information on a specific topic. In fact,
research is an art of scientific investigation.

Basically, research is the process of problem-solving. For example, business research involves a
systematic and objective process of generating information for aid in making business decisions.

Note: Research=Re+ Search,

 Re=a new, over again

 Search=to test and to probe

¿>¿ Together, Research=a carefully, systematic, patient study and investigation in some flied of
knowledge.

Research is, thus, an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison and
experiment. In short, the search for knowledge through objective and systematic method of finding
solution to a problem is research.
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Constant search for additional knowledge is the guiding factor of research which helps to discover
new facts. The search of new knowledge also helps to accept, reject or modify existing facts or
knowledge. It is a systematic effort to gain knowledge, truth or broad principles in a verifiable and
objective way. Research will also help to ascertain existing theories or modifying or rejecting them
and build or construct new theories on the basis of research.

The main aim of research is to search deeply and persistently and penetrate into the reasons of
occurrence and relationships. Thus, research as Young points out does not simply demand a search
for facts, but thinking through of the issues and problems involved in every step of the research
process. This is why research is said to originate as a matter of curiosity of human mind to know, to
examine and to re-examine things. The main aim of research is to eliminate vague, superstitions and
dogmatic idea by reasoned, objective and scientific ideas.

You shall, nevertheless, note that all definitions share the fact that research is a diligent enquiry and
careful search for new knowledge through systematic, scientific and analytical approach in any
branch of knowledge. As so, the learner may ask ‘what characterizes research?’

1.2. Characteristics of Research

Among other things, a research is characterized by:

 Purposiveness: Research is not a mere complication. It originates with unanswered question

or an unsolved problem that draw the questions why? What is the cause? etc.
 Testability: It is guided by a specific research problem question or hypothesis generated from
theory, intuition which needs to be tested based on empirical evidence and/or observable
experience.
 Replicability: Findings at one area can be applied for other areas. For example, research
findings in Debre Markos town can be used to formulate policy on other similar environments.
 Precision and Confidence: Since researches are usually done using samples, the level of
precision and confidence for research the results should be presented. The usual levels of
confidence used are 90%, 95% and 99%.
 Procedural: It requires an explicit and logical research design and research method.
 Objectivity: It is undertaken through the use of the scientific method applying possible tests to
validate the measurement tools and conclusions based on the data obtained.

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 Generalizability: Research emphasizes on the development of generalizations based on

findings (obtained usually using samples).
 Simplicity and Clarity: the goal of the research which shows what a researcher precisely
intends to do must be clearly and easily articulated.
 Cyclical: there is a search for a search to become research.

1.3. Motivation in Research

What makes or initiates people to undertake research? This is a question of fundamental importance.
The possible motives for doing research may be either one or more of the following:

i. Desire to get a research degree along with its consequential benefits

ii. Desire to face the challenge in solving the unsolved problems, i.e., concern over practical
problems initiates research
iii. Desire to get intellectual joy of doing some creative work
iv. Desire to be of service to society
v. Curiosity about new things
vi. Directives of government, business organization, etc.
vii. Desire to get respectability.

However, this is not an exhaustive list of factors motivating people to undertake research studies.
Many more factors such as employment conditions, desire to understand causal relationships, social
thinking and awakening, and the likes may as well motivate (or at times compel) people to perform
research operations.

1.4. Classification and Types of Research

There are different ways of classifying research and there is no clear dividing line between one
method and the other either. The basic types of research are classified based on:

 Specific objectives: Descriptive Vs. Analytical Research

 Goals: Applied vs. Fundamental
 Approaches: Quantitative vs. Qualitative
 The time required to accomplish the research: One-time research Vs. longitudinal research
 The environment in which research is done: Field-setting research Vs. laboratory research
or simulation research
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i. Descriptive Vs. Analytical Research:

Descriptive research: It includes surveys and fact-finding enquiries of different kinds. The major
purpose of descriptive research is description of the state of affairs as it exists at present. The
main characteristic of this method is that the researcher has no control over the variables; he can
only report what has happened or what is happening. It also includes attempts by researchers to
discover causes even when they cannot control the variables. Example,

 Frequency of shopping,
 Preferences of people,
 A survey of socio-economic condition of urban people.

The methods of research utilized in descriptive research are survey methods of all kinds, including
comparative and correlational methods.

Analytical/Explanatory research: Here, the researcher already has the description of an issue and
uses these facts or information to analyze the “why” aspect and make a critical evaluation of the
material.

ii. Fundamental Vs. Applied

Fundamental research: It is mainly concerned with generalizations and with the formulation of a
principles, theories & models. Example,

 Research concerning some natural phenomenon or relating to pure mathematics

 Research studies, concerning human behaviour carried on with a view to make generalizations
about human behaviour;
 But, research aimed at certain conclusions (say, a solution) facing a concrete social or
business problem is an example of applied research.

Basic research is usually too challenging as it requires the accumulation of knowledge and is mostly
used for elder scientists & professors. It cannot be used for solving pragmatic (concerned with actual
circumstances rather than general theories) issues

Applied research: It aims at finding a solution for an immediate problem facing a society or an
industrial/business organization. Example,

 Research to identify social, economic or political trends that may affect a particular institution
or the copy research or the marketing research or evaluation research.
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In general, the central aim of applied research is to discover a solution for some pressing practical
problem, whereas basic research is directed towards finding information that has a broad base of
applications and thus, adds to the already existing organized body of scientific knowledge.

It is conducted when there is a desire to formulate developmental strategies and policies; when
you need action to combat the existing or possible problems. In a nutshell, basic research tries to
extend the knowledge in a given field and applied research tries to solve problems.

iii. Quantitative vs. Qualitative

Quantitative research: It is the systematic and scientific investigation fo quantitative properties and
phenomena and their relationships. It is based on the measurement of quantity or amount. It is
applicable to phenomena that can be expressed in terms of quantity/number. The objective is to
develop mathematical models, theories and hypothesis pertaining to the natural phenomenon.
Most economic researches are done using this method. Example,

 Determinants of consumption,
 Impact of devaluation of Birr on the BOP of Ethiopia,
 Determinant of private investment in Ethiopia, etc.

It can be further sub-classified into inferential, experimental and simulation approaches

Inferential approach: Its aim is to form a data base from which to infer characteristics or
relationships of population. This usually means survey research where a sample of
population is studied (questioned or observed) to determine its characteristics, and it is
then inferred that the population has the same characteristics.

Experimental approach: is characterised by much greater control over the research environment
and in this case some variables are manipulated to observe their effect on other variables.

Simulation approach: involves the construction of an artificial environment within which

relevant information and data can be generated. This permits an observation of the
dynamic behaviour of a system (or its sub-system) under controlled conditions. The term
‘simulation’ in the context of business and social sciences applications refers to “the
operation of a numerical model that represents the structure of a dynamic process.

Qualitative research: It is concerned with qualitative phenomenon, i.e., phenomena relating to or

involving quality or kind. Example,

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 Research aims at discovering the underlying motives for learning BA degree in economics,
using in depth interviews for the purpose.
 Word association tests, sentence completion tests, story completion tests and similar other
projective techniques.
 Attitude or opinion research i.e., research designed to find out how people feel or what
they think about a particular subject or institution

Qualitative research is especially important in the behavioral sciences where the aim is to discover
the underlying motives of human behavior. Through such research, we can analyze the various
factors which motivate people to behave in a particular manner or which make people like or dislike a
particular thing.

 Concerned with subjective assessment of attitudes, opinions and behaviour.

 Research is a function of researcher’s insights and impressions.
 Generates results either in non-quantitative form or in the form which are not subjected to
rigorous quantitative analysis.
 Usually uses the techniques of focus group interviews, projective techniques and depth
interviews are used.

iv. Conceptual vs. Empirical

Conceptual research: - It is that related to some abstract idea(s) or theory. It is generally used by
philosophers and thinkers to develop new concepts or to reinterpret existing ones.

Empirical research: It relies on experience or observation alone, often without due regard for system
and theory. It is data-based research, coming up with conclusions which are capable of being
verified by observation or experiment. We can also call it as experimental type of research. In
such a research, the researcher must first provide himself with a working hypothesis or guess
as to the probable results. He then works to get enough facts (data) to prove or disprove his
hypothesis. He then sets up experimental designs which he thinks will manipulate the persons
or the materials concerned so as to bring forth the desired information. Such research is thus
characterized by the experimenter’s control over the variables under study and his deliberate
manipulation of one of them to study its effects. Empirical research is appropriate when proof
is sought that certain variables affect other variables in some way. Evidence gathered through

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experiments or empirical studies is today considered to be the most powerful support possible
for a given hypothesis.

v. Some Other Types of Research: All other types of research are variations of one or more of the
above stated approaches, based on either the purpose of research, or the time required to
accomplish research, on the environment in which research is done, or on the basis of some
other similar factor.

a. One-time research Vs. Longitudinal research

One-time research: the research is confined to a single time-period,

Longitudinal research: the research is carried on over several time-periods.

b. Exploratory Vs. Formalized

Exploratory research: It is used when there are few or no earlier studies to which references can
be made for information.

 It is used for a problem that has not been clearly defined.

 Mainly used to develop hypothesis rather than testing a pre-conceived hypothetical notion.
 Mainly used to get insight rather than aiding for decision-making.
 Concerns on investigating a new area of research (Exploration)

Formalized research: are those with substantial structure and with specific hypotheses to be
tested.

1.6. Significance of Research

“All progress is born of inquiry. Doubt is often better than overconfidence, for it leads to inquiry, and
inquiry leads to invention” stated Hudson Maxim in context of which the significance of research can
well be understood. Increased amounts of research make progress possible. Research inculcates
scientific and inductive thinking and it promotes the development of logical habits of thinking and
organization.

The role of research in economics, and other fields, whether related to business or to the economy as
a whole, has greatly increased in modern times. The increasingly complex nature of business and
government has focused attention on the use of research in solving operational problems. Research,
as an aid to economic policy, has gained added importance, both for government and business.

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Research provides the basis for nearly all government policies in our economic system. For instance,
government’s budgets rest in part on an analysis of the needs and desires of the people and on the
availability of revenues to meet these needs. The cost of needs has to be equated to probable revenues
and this is a field where research is most needed. Through research we can devise alternative policies
and can as well examine the consequences of each of these alternatives. Some of the significance
research includes the following.

 Increased amount of research makes progress and development possible

 Increases complexity in business and government
 Increases information and knowledge
 Facilitates optimum resource allocation
 Enables development of new styles and creative work
 Generalization of new theories
 Important source of providing guidelines for solving different problems
 Providing a basis for further research…….. etc.

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Chapter One Introduction.