A real solution to a real problem

lies on the understanding

the nature of qualitative and quantitative variable indicators
that explain events meaningfully.

- Abdi-Khalil Edriss -

INDICATORS AND VARIABLES

Indicators and variables are the core of research, and they are the direct or indirect
measure of an event. Without indicators and variables there is no research.

5.1. What is an indicator?

An indicator is a direct or indirect measure of an event or condition.

Therefore, an indicator is an objectively verifiable measurement, which
reflects the activity, assumption, or effect being measured, and allows for
comparisons both between different elements, items, individuals or
populations.

Tables 5.1 to 5.7 list some statistical indicators that are mostly used to
indicate the socio-economic situations of developing countries. These are –

1. Basic social services indicators

2. Population, economic development and poverty indicators
3. Food security indicators

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 4. Governance and Human Rights indicators
5. Gender equality and women’s empowerment indicators
6. HIV/AIDS indicators
7. Macro indictors

I – Basic social services indicators

Basic services indicators are – education, health, nutrition, water and sanitation
indicators. The details are as follows:

Table 5.1: Basic social services indicators

Education indicators
Adult literacy rate (age 10+)
Adult literacy rate (age 10+) for women
Adult literacy rate (age 10+) for men
Literacy rate for women (15-24 years)
Literacy rate for men (15-24 years)
Ratio of female to male literacy
Number of primary schools
Total primary enrolment
Percent of girls in total primary enrolment
Girls to boys ratio of primary school completion
Percent of girls with easy access to primary school (time or distance criterion)
Percent of boys with easy access to primary school (time or distance criterion)
Gross primary enrolment rate
Net primary enrolment rate
Net entry rate to primary (Grade 1 admissions of age 6 divided by total population
6 years olds)
Gross entry rate to primary (Total admissions for grade 1 divided by total
population 6 years olds)
Percent of girls completing primary school
Percentage of boys completing primary school
Student to teacher ratio in primary schools
Number of Early Childhood Care and Development (ECCD) centers
Number enrolled in ECCD centers
Percentage allocation of government expenditure to education

Health indicators
Percentage of women with access to primary health facility (distance or time
criterion)
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 Percentage of men with access to primary health facilities
Total population with access to primary health facilities
Population to doctor ratio
Population to nurse ratio
Population to hospital bed ratio
Life expectancy at birth
Leading causes of mortality (e.g., from in-patient data)
Infant mortality rate
Under 5 mortality rate (girls)
Under 5 mortality rate (boys)
Incidence of major diseases (leading causes of out-patient attendance)
Ten leading causes of hospital admissions
Percentage children immunized by antigen (e.g., DPT, measles, polio)
Reported cases of polio for girls
Reported cases of polio for boys

Nutrition indicators
Percentage under-5 moderately underweight by sex
Percentage under-5 severely underweight by sex
Percentage under-5 moderately stunted by sex
Percentage under-5 severely stunted by sex
Percentage under-5 moderately wasted by sex
Percentage under-5 severely wasted by sex
Percentage low birth weight babies by sex
Rate of Vitamin A deficiency
Rate of Iodine deficiency
Percentage of children breastfed
Percentage government expenditure on health
Per capita public expenditure on health

Water and Sanitation indicators

Percentage of population with access to safe drinking water
Percentage of population with access to adequate sanitary disposal
Percentage of population with access to proper waste collection

II - Population, economic development and poverty indicators

Population, economic and poverty indicators are given as demographic & population
indicators, economic development and poverty eradication indicators, and

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environment and natural Resources conservation indicators. Details are tabulated as
follows.

Table 5.2: Population, economic development and poverty indicators

Demographic & Population policy implementation indicators

Rate of population growth
Age to sex ratio structure of population
Youth dependency ratio disaggregated by sex
Old dependcy ratio disaggregated by sex
Crude birth rate disaggregated by sex
Crude death rate disaggregated by sex
Natural rate of increase in population
Total fertility rate
Adolescent fertility rate
Mean age of women at first pregnancy
Percentage of women having knowledge of contraception
Percentage of men having knowledge of contraception
Percentage of health facilities providing fp services
Women’s contraceptive prevalence rate
Men’s contraceptive prevalence rate
Number of new family planning acceptors who are women
Number of new family planning acceptors who are men
Percentage of births attended by trained health personnel
Percentage of births in medical facility
Percentage of women with access to pre-natal care
Percentage of women with access to post-natal care
First ante-natal clinic (ANC) by 1st, 2nd, and 3rd trimester
Maternal mortality rate (per 100, 000 live births)
Under-5 mortality rate (per 1, 000 live births)
Abortion rate

Economic development and poverty eradication indicators

Rate of economic growth
Rate of inflation
Consumer index
Percentage of population below poverty line
Percentage of women below poverty line
Percentage of men below poverty line
Poverty gap ratio
Gini coefficient (income)
Gini coefficient (consumption expenditure)

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 Share of poorest 20 per cent in consumption
Gini coefficient of agricultural land ownership
Average cultivated area of female smallholders
Average cultivated area of male smallholders
Percentage of smallholders below poverty line (women)
Percentage of smallholders below poverty line (men)
Percentage of female-headed households
Percentage of female-headed households below poverty line
Labour force participation rate of working age population
Percentage of women in labour force participation
Percentage of men in labour force participation
Total unemployment rate
Total unemployment rate for women
Total unemployment rate for men
Percentage of labour force with no formal education
Percentage of women in labour force without formal education
Percentage of men in labour force without formal education
Percentage of girl children in labour force
Percentage of boy children in labour force
Statutory minimum wage for women
Statutory minimum wage for men

Environment and Natural Resources conservation indicators

Arable land per capita

Percentage of urban population
Percentage of urban population that are men
Rate of rural-urban migration for women
Rate of rural-urban migration for men
Water withdrawals as percentage of water resources
Rate of soil erosion
Total area under forests
Forest coverage as percentage of total land area
Percentage of forest area designated as conservation area
Percentage of population relying on firewood/charcoal for domestic use
Percentage of population have access to electricity
Annual rate of deforestation
Annual rate of reforestation (tree-planting)

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III – Food security indicators
Table 5.3: Food security indicators
Percentage contribution of agriculture to GDP
Percentage of labour force in agriculture
Total cultivable area
Total land area under cultivation
Land area cultivated by women
Cropping intensity
Major crop yields (per hectare) cultivate by women
Major crop yields (per hectare) cultivate by men
Per capita grain production
Per capita grain availability (including imports)
Daily per capita caloric consumption
Percentage women below minimum level of dietary consumption
Percentage men below minimum level of dietary consumption
Food imports to production ration

IV – Governance and human rights indictors are listed in Table 5.4.

Table 5.4: Governance and Human Rights indicators

Voter registration as percentage of eligible population
Percentage of women as registered voters
Percentage turn out of registered voters at general election
Percentage of women voters casting votes
Share of government (civil service) in total population
Percentage of women in the civil service in total employment
Population per policeman
Statistics of crimes committed (murder, rape, car thefts, etc.)
Number of criminal cases remaining unsolved by type of crime
Percentage of detainees held without trial/being charged over an acceptable minimum
duration
 Number of minors held in adult jails
 Number of cases filed by workers in labour courts

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V – Gender equality and women’s empowerment indicators
These indicators are tabulated in Table 5.5 and they are Social Empowerment,
Political Empowerment Cultural Empowerment

Table 5.5: Gender equality and women’s empowerment indicators

Social Empowerment

Number of cases reported of sexual assault against women

Number of cases reported of domestic violence against women
Incidence of trafficking in women
Number of laws that are explicitly or implicitly discriminatory against women
Number of discriminatory laws repealed or amended
Number of laws tackling domestic violence
Number of national policies in the workplace that protect women from arbitrary
dismissals/harassment and/or are gender sensitive
Number of cases reported for by women for unlawful dismissal
Number of national policies in the workplace that protect pregnant women
Percentage of police dealing with issues of violence against women
Number of crisis centers in police stations dealing with victims of violence
Number of crisis centers or shelters for victims of violence established by government
 Number of crisis centers or shelters for victims of violence established by NGOs

Political Empowerment

Percentage of women in professional and administrative jobs

Percentage of women working as unpaid domestic help
Percentage of women office bearers in political parties
Percentage of Parliamentary seats held by women
Number of women Ministers and Deputy Ministers
Percentage of women among top 50 (100) civil service positions
Percentage of women in total magisterial/judicial/police/prison positions
Percentage of women among chief executives of parastatal and NGOs
Percentage of women on diplomatic assignments abroad
Percentage of women who are chief executives of district assemblies
 Percentage of women who are members of District Assemblies

Cultural Empowerment
Incidence of food taboos for women
Incidence of harmful traditional practices against women by age and region
Percentage of women who are traditional authority leaders
Percentage of women who are religious leaders
 Percentage of women who are practice traditional medicine
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VI – HIV & AIDS indicators
Table 5.6: HIV/AIDS indicators

HIV-sero prevalence for women and girls

HIV-sero prevalence for men and boys
Number of new AIDS cases reported for women
Number of new AIDS cases reported for men
Percentage of hospital beds occupied for AIDS-related illnesses
Distribution of new AIDS cases by age and sex groups
Median age of women at first sex
Median age of men at first sex
Percentage of sexually active women reporting awareness of how HIV/AIDS is
transmitted
Percentage of sexually active men reporting awareness of how HIV/AIDS is transmitted
Percentage of sexually active women having knowledge of condoms
Percentage of sexually active men having knowledge of condoms
Percentage of family planning facilities reporting satisfactory condom stocking
procedures
Number of women who have died of AIDS-related causes
Distribution of AIDS=related deaths by sex, age and education
Number of AIDS orphans
 Percentage of government budget allocated for HIV/AIDS programmes

VII – Macro-Economic indicators

Table 5.7: Macro indicators

Area of a country
Population
GNP
GNP per capita
GDP
GDP per capita
Human development index
Gender-related development index
Gender empowerment measure
Balance of payments
Balance of trade

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 Total external debt
External debt as percentage of GNP
Annual debt repayment
Gross domestic savings as percent of GDP
Share of foreign direct investment inflows in GDP
Total government budget
Share in government budget of public expenditure on social services
 Share of government and donor aid budget targeting the advancement of women or
other disadvantaged groups
Sources: UNDP Human Development and Common Country Assessment Reports – various years

5.2. What are the characteristics of a good indicator?

Good indicators are simple, clearly defined, valid, reliable, variable,

measurable, and quantifiable.

i. Simple – an indicator should not be more complex than they need to be.
Because the collection, management, and data analysis is costly both in
human and financial terms, indicators should be as simple as possible
without compromising the essence of the variable.

ii. Clearly defined – an indicator should be clearly and precisely defined,

what they measure in particular.

iii. Valid – an indicator should accurately reflect the concept it is supposed

to measure.

iv. Reliable1 - an indicator must be reliable so that regardless of who

collects the data, the results will be nearly identical. Reliability is not the
same as accuracy. Accuracy refers to the precision with which a
1
CRONBACH’S ALPHA is a reliability coefficient that indicates how well the items in a set are
positively correlated to one another. Cronbach’s alpha is computed in terms of the average inter-
correlations among the items measuring the concept. The closer Cronbach’s alpha to 1 the higher the
internal consistency reliability. In general, reliabilities less than 0.60 are considered to be poor, those in
the 0.70 range, acceptable, and those over 0.80 good. It is important to note that all the negatively
worded items in the questionnaire should first be reversed before the items are submitted for reliability
tests. Unless all the items measuring a variable are in the same direction, the reliabilities obtained will
be incorrect. SPSS version 9.0 or latest version could do the job. Note that consistency also indicates
how well the items measuring a concept hang together as a set. Either Cronbach’s alpha or split-half
reliability coefficient (Campbell, 1976) could be used to test consistency reliability of the data.
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 measurement is taken. For example, height should be measured to the
nearest centimeter; weight to the nearest 50 grams. Evaluators should be
careful to train data collectors carefully, so that their measurements are
all accurate to the same standard. This refers both to the accuracy of
repeated measures taken by one person (intra-individual reliability), and
to the accuracy of the same measurement taken by several different
individuals (inter-individual reliability)

v. Variable – to be useful, an indicator must show variation between

subjects and over time. If an indicator does not vary, then even if it is
valid, it will not discriminate between those who have benefited from the
program and those who have not.

vi. Measurable – an indicator should be measurable, whether it is

quantitative or qualitative in nature. Height and weight are directly
measurable; access to credit or adoption of technology can be measured
simply by observation once “access” or “adoption” is defined. Often, a
scale or index needs to be created to measure a qualitative variable in
quantitative terms. For example, access to credit equals 1, and no access
to credit equals 0.

vii. Quantifiable – an indicator should be quantifiable, and where

appropriate, presented as ratios or proportions. Actual numbers are
occasionally meaningless unless they are converted into some types of
proportion.

5.3. What is a variable?

A variable is anything that can take on differing or varying values. The values
can differ at various times for the same object or persons, or the values can
differ at the same time for different objects or persons. Examples of variables
are sex, education level, examination scores, motivation, adoption, etc.

5.4. Give an example of operational definitions and measurements

of variables.

Here is an example from real research that has been done at Bunda College of
Agriculture, University of Malawi. The operational definitions for the key
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terms related to groundnut production research are given as follows. It
includes the descriptions of types of data that are in the analysis, as well.

Operational definitions and measurements for socio-economic

variables or characteristics

i. Age of the household head – age is one of the factors that affect
production decisions and the efficiency of carrying out farm activities.
It is categorized in age groups (15-29, 30-49, 50-59 and above 60) so
that it should be possible to determine which age group is most
actively involved in farm activities (labor supply potential to the family
farm activities)

ii. Educational status of the household head – education is described as

an essential element in any development process. It is argued that
educated people can understand agricultural instructions very easily
and be able to apply technical skills imparted to them than the
uneducated ones. Education also plays roles in farming activities such
as in adopting agricultural technologies. Thus the level of education of
the household head measurement can be taken from the five categories
of education attained, namely, primary education, secondary education,
tertiary, others (vocational etc.) and none.

iii. Sex of the household head – in Malawi, female-headed households

constitute about 30% of the total households heads, and females also
play a major role in subsistence farming activities (Malawi
Government, 1997). Thus this variable measures women’s contribution
to household groundnut production in terms of their time and family
labour supply. Hence, using this variable it may be possible to
determine gender differential in groundnut productivity. Household
head is categorized into male and female (male = 0, female = 1).

iv. Land holding size and acquisition – land is one of the most important
and scarce resources in agricultural production. In Malawi, rapidly
increasing population is exerting extreme pressure on land. This has led
to continuous cultivation of the same pieces of land, cultivation of the
marginal lands and small farmers land holding sizes that are often
fragmented. Land availability at household level may determine the
types of crops grown, as well as the cropping pattern. Based on the
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 national average land holding size and land tenure policy, the land
holding sizes in the study areas are placed in five categories. These are:
below 1 hectare, 1-2 ha, 2.1– 5 ha, 5.1-10 ha, and above 10 hectares.

v. Management practices - proper crop management practices such as

early planting (at first rain or not), seed rate (density of seeds in
kilogram per planting station), good plant spacing (space measured
between planting stations in centimeter), early weeding (early weeding
that may affects yield level, dummy 0 or 1), disease control (dummy 0
or 1) and extension services (dummy 0 or 1) are regarded as
management practices that can affect the groundnut production. This
helps to evaluate the presence or absence of extension workers in the
study area who could instruct farmers about the recommended crop
management practices in groundnut production and farming activities
in general.

vi. Inputs use – this variables look at the differences in input patterns that
can help to identify potentials and opportunities for improving
groundnut production. The inputs under consideration are: - land (in
hectares), labour (man-days/hectare), seed density (kg/hectare),
fertilizer (in kilogram) and farm credit (whether the farmers has access
to credit).

vii. Adoption of groundnut technologies – here we attempt to examine

how the socio-economics variables affect technology adoption. The
dependent variable is the number of years2 after a technology is
available that a farmer adopts it. The dependent variable takes on
discrete integer (count) values in years. The technologies are seed
varieties (CG7, local groundnut (chalimbana) and other types of
groundnut seeds), intercropping (groundnut mix planting with other
major crops such as maize, pigeonpea, soybean, sorghum, potato, etc),
rotation (seasonal cropping pattern), ridging, and erosion control
(whether the farmer practices any kind of conservation practices on the
piece of land allocated for groundnut production).

2
The counting would be done from the year the new technology; seed variety (CG7) was introduced in
Malawi. ICRISAT introduced the CG7 groundnut variety in 1989/90 agricultural seasons in Malawi.
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The vector of socio-economic characteristics represents the independent variables.
These are farmer education, farm size, extension visit, household head type,
household size, etc. These are expected to explain the difference in adoption time
among farmers. Also, the study attempts to find which socio-economic variables are
the determinants of technology adoption in groundnut production.

VIII – Classification of Variables

It is important to classify variables because the choice of analysis depends on what
types of variables we deal with. In other words, classification is important for
determining which method of data analysis to use, whether it is quantitative or
qualitative analysis.

Variables can be classified in a number of ways. The most frequently used

classifications are –

By gapiness or qualitative variables – these include discrete, binary or

categorical variables such as sex, martial status, religious groups, etc.

By no gaps or quantitative variables – these mainly include continuous or

ordinal variables such as age, blood pressure, prices, weight, height, etc.

By descriptive orientation – if a variable is described by an other variable

then one variable can be a response (dependent) variable and the other one
can be a predictor (independent) variable.

By level of measurement – indicates if a variable is measured in nominal,

ordinal or interval scale.

POINTS TO PONDER
Classification of the variables may overlap. For example, a nominal variable can be a
discrete variable, as well as a continuous variable can be measured by interval scale.
Be aware of the over-lapping of the classifications.

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IX – Statistical Inferences

5.5. Describe types of statistical inferences.

They are two types of statistical inferences. Namely, estimation and

hypothesis testing.

Estimation refers to describing or quantifying the characteristics and

strengths of relationships of variables.

Example: For sample observation containing a set of observations,

Y={y1, y2, y3, y4} the sample characteristics such as sample mean
denoted by y , and sample variance, s2, are estimates of population
parameters, mean, and variance, 2, respectively.

Testing refers to specifying a hypothesis about relationships, making

statements of probability about the reasonableness of such a
hypothesis. It also provides a practical conclusion based on such
statements.

Example: For the observations above, sample characteristics estimates

such as sample mean, y , and sample variance, s2, can be used to make
2
inferences about the population mean, , and variance, ,
respectively.

For example, = y 1.96 (s/ n) implies testing of the sample mean if

it is within the boundary of 95% confidence interval for n > 30.

5.6. How do we test relationships (not causality) of variables?

Apparently, relationships can be tested by using correlation and modeling

techniques. There are several types of relationship tests. The most
frequently used relationships or correlation tests are – simple correlation
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 coefficient, multiple, partial, phi-coefficient, Cramer statistic, Kruskal-
Wallis statistic and point bi-serial techniques. Refer to Distilled Applied
Statistics Book (2013) by Abdi-Khalil Edriss.

POINTS TO PONDER
As far as modeling is concerned, the model parameters have to be estimated from the
data. Then testing of a model for its adequacy and constructing confidence intervals
or testing the significance of estimates and inference making procedures should be
done for the acceptance of the association between the variables under investigation.

5.7. What are some of the characteristics of statistical inferences

such as Estimation and Hypothesis testing?

Estimation – deals with estimating the specific value of an unknown

population parameter via sample estimates.

Unbiased estimates: an estimator is unbiased if the expected value of

its sampling distribution equals the population (or true) parameter.

For example if the expected value of ymean equals to the population

mean, that is, E( y ) = , then the sample mean, y , is unbiased
estimator of the population mean, .

Consistent estimates: two conditions are required for an estimate to be

consistent (1) as the sample size increases, the estimator approaches
the population parameter (2) as the sample size approaches infinity in
the limit, the sampling distribution of the estimator must collapse or
become a straight vertical line with the height of probability 1 at the
true value of the parameter. In other words, the variability within the
sample statistic reduces, nearing the actual parameter value.

OLS estimates must have minimized Mean Square Error (MSE). Refer
to chapter six for details on OLS method when performing regression
analysis.

Hypothesis testing – is concerned with making a decision about a

hypothesized value of an unknown population parameter. The most
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 2
frequently used testing statistics include t-statistic, F-statistic, z-score, ,
etc.

5.8. What is hypothesis?

Hypothesis can be defined as an expression or a logically conjectured

relationship between two or more variables expressed in the form of a
testable statement.

5.9. Discuss the two types of hypotheses.

The null hypothesis is usually a proposition that states a definitive, exact

relationship between two variables. For example, it states that the
population correlation between two variables is equal to zero or that the
difference in the means of two groups in the population is equal to zero (or
some definite number). In general, the null hypothesis is expressed as no
(significant) relationship between two variables or no (significant)
difference between two groups. The alterative hypothesis, which is the
opposite of the null, is a statement expressing a relationship between two
variables or indicating differences between groups.

EXAMPLES

Submit a research topic as a hypothesis statement. Restate the topic as one or more
research questions. Describe how each approach would influence the research
methodology. Compare the advantages and disadvantages of each method.

The research topic will mainly examine the following hypotheses –

Hypothesis 1: Socio-economic variables (non-physical factors) do not influence the

dynamics of groundnut production, inter-household and intra-household transactions
in Malawi.

Note that it is preferable to state the specific socio-economic variables such as

education, sex, household head, income, age, etc., rather than state the hypothesis in
lump fashion

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Hypothesis 2: Groundnuts are not profitable compared to competing cash crops
(maize, and tobacco) in the country.

Hypothesis 3: There is no gender differential in groundnut productivity in Malawi.

Hypothesis 4: Improved seed variety (CG7 groundnut type) is not significant in

groundnut production at the household level.

These hypotheses can also be restated as research questions as follows:

What are the major factors influencing productivity at farm levels?

What are the socio-economic characteristics that determine groundnut
productivity?
What is the potential for improving productivity through technology adoptions?
What is the role of women in the dynamics of groundnut production?
What is the current level of technical efficiency in groundnut production?
What is the current level of groundnut marketability and profitability compared to
main cash crops, maize and tobacco, in Malawi?
What is the contribution of groundnut to the national economy?

Advantages and disadvantages of each method

In hypothesis testing it may be possible to define a testable hypothesis that can be

proved or disproved through some sort of statistical procedures. It is possible to
formulate anticipated relationships between two or more variables that can be tested.
The researcher may go beyond merely describing the variables in a situation to
understand the relationships among factors of interest. But, it may be disadvantageous
to identify a set of specific questions that can be answered vaguely.

On the other hand, research questions can be intended to pinpoint the research
problems and tackle the problems one by one. They also enable a researcher to
explore the required information by focusing on each question one at a time.
However, research question, statistically speaking, may be less advantageous in
formulating a linkage between a research question and a testable variable that may be
proved or disproved using statistical procedures readily available.

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Generally speaking, the two approaches are complementary in research studies
because they enable researchers to enumerate the problem statements and achieve the
objectives of the study through examining the subject matter in-depth and details.

5.10. What is a -value? And discuss its use.

A -value is the probability of obtaining a value of the test statistic which

is at least as unfavorable to the null hypothesis as the observed value. It
quantifies exactly how unusual the observed results would be if the null
hypothesis were true.

Interpreting -value – observe if is quite small, i.e., the small -

value indicates that we have observed a highly unusual result if
indeed the null hypothesis is true, so that -value so small to lead
us to reject the null hypothesis.

Drawing Conclusion – if an investigator wishes to draw

conclusions about a test on the basis of the -value, the following
guidelines are recommended:

i. If -value is small (less than 1%), reject the null hypothesis

ii. If -value is large (greater than 10%), do not reject the null
hypothesis
iii. If -value is between 1% and 10%, the significance is
borderline, i.e., we reject the null hypothesis for = 0.01
(significant level) but not for = 0.1.

NUMERICAL EXAMPLE
A project evaluation was done after 4 years of project implementation using different
types of variables in a certain district. The following table is produced for just one
indicator, where surveys were done at project area, non-project area (in 2000) and
during baseline survey (in 1996). Did the project make any significant impact in its
area? Or, are there any significant differences between project area and non-project
area, as well as, between project areas in 2000 and 1996?

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Table 5.1: Prevalence of blindness evaluation
Baseline Follow up Control
(1996) survey [Non-project
[Project area] [Project area] area]
Indicator Nb pb (nb) Nf pf (nf) Nc pc (nc)
Prevalence
of
986 4.4 (43) 160 1.3 (2) 19 0 (0)
blindness
in
pregnant
women %
(n)
1 0.081 2 = 0.36
Note: 1 is the p-value for baseline survey (1996) and follow-up survey (2000). That is comparison between baseline
and follow-up survey. 2 is the p-value for follow-up (project area) survey and control (non-project area). That is
comparison between follow-up and control communities.
Nb is the total number of pregnant women in 1996 in the project area, while n b is the number of pregnant women
randomly sampled from Nb
Nf is the total number of pregnant women in 2000 in the project area, while n f is the number of pregnant women
randomly sampled from Nf
Nc is the total number of pregnant women in 2000 in the non-project area, while nc is the number of pregnant women
randomly sampled from Nc

Calculations

pb = nb/Nb = 43/986 = 4.4%

pf = nf/Nf = 2/160 = 1.3%

pc = nc/Nc = 0/19 = 0%

And, the p-values are calculated as follows:

Z = [pb – pf]/standard deviation of the pooled sample = [pb – pf]/sp

Where sp = pq(1/nb + 1/nf); and p = [nbpb + nfpf]/[nb + nf];

and q = 1-p

Thus, p = [43 (0.044) + 0.013 (2)]/[43 + 2]

= 0.0426

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 and q = 1 – p = 1 – 0.0426 = 0.957

sp = (0.0426)(0.957)(1/43 + 1/2) = (0.0426)(0.957)(0.0233+0.5)

= 0.022

Therefore,
z = [pb – pf]/sp = [0.044 – 0.013] /0.022 = 0.031/0.022 =1.409

The corresponding area for z = is 0.4192 as given in Z-table. Also note the p-
value is subtracted from 0.5, which is the total area for the half normal curve)

Hence, the p-value, 1, is

1 = 0.5 – 0.4192 = 0.081

Conclusion: Results in the table show tendency toward a decrease in the

prevalence of night blindness in pregnant women in 2000, as shown with the
borderline p-value, 1 = 0.081.

In both project areas and control communities there is no significant decrease

in night blindness among pregnant women. Perhaps, the small sample size
limited the power to find a statistical significant difference. For 2 = 0.36,
there is no significant difference between the project area and non-project
area; and hence the project did not make any impact in the communities.

X – Value Chain Indictors

5.11. Explain value chain indicators.

Beyond the analysis of cost build up, quantitative value chain analysis
is also interested in the type of costs incurred as a product accumulates
its value. This helps to identify areas where new policies or process
innovations could have the greatest impact on international
competitiveness.

Because developing countries often only able to influence prices

within their own borders, thus the value chain analysis, in particular,
focuses in the composition of domestic costs. These costs include
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 legitimate local business expenses and mark-ups, official customs
duties and taxes, and any number of unofficial payments that are
sometimes made to facilitate a particular operation. Therefore, the
value chain indicators are sum up as Domestic Value-Added (DVA)
and Shipment Value (SV).

According to Tchale (2008), a product’s total value at any given stage in the value
chain, therefore, is equal to the sum of all domestic prices and imported cost
components. These costs are measured in terms of Domestic Value Added (DVA)
and Shipment Value (SV), which constitute the main value chain indicators as
follows.

Domestic Value Added (DVA) = Domestic costs and mark-ups

+ Official duties and tax
+ Unofficial charges and extra costs [1]

Shipment Value (SV) = Domestic Value Added+ Foreign components [2]

DVA and SV are measured according to equations [1] and [2] respectively on a per
ton basis at each stage of the value chain for the following products.

Farm production Farm gate product

Assembly Assembled raw material
Processing Processed raw material
International logistics Traded commodity (Product 1, 2, 3)

For cross-country comparisons, the final calculation of SV for each traded commodity
is the most comprehensive measure of actual and potential competitiveness. For a
given product or commodity produced in a specific country, international
competitiveness is determined by comparing SV at the final destination (sale point)

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with a benchmark. The benchmark will usually be the cost–insurance–freight (cif)
reference price for the product or commodity at the specified destination.

By looking at the composition of SV, including the elements of DVA that contribute
to this total figure, one can gain further insight on where costs can most effectively be
reduced. If some cost accounts for a very large share of total value, or is significantly
higher than the international benchmark, then new policies or other investments
focused on reducing this cost would likely be an effective strategy for improving trade
competitiveness.

Similarly, by looking at the build-up of SV (and DVA) from stage to stage, one can
gain insight to the competitiveness of individual participants. If farm production, for
example, accounts for a disproportionately large share of final shipment value (either
in absolute terms or compared with an international benchmark) then policy
interventions or other investments focused on this stage of the supply chain may be
required.

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========================================================
MENTAL GYMNASTICS
CHAPTER FIVE
=======================================================

1. Distinguish between the following of pairs of terms.

a) Indicators and Variables
b) Estimation and Hypothesis
c) Unbiased estimate and Consistent estimate
d) Domestic Value Added and Shipment Value

2. True, False or Uncertain. Support your answer.

a) An indicator is a variable.
b) The smaller the confidence interval, the smaller the sample size is needed for
the actual survey.
c) Consistent estimate is unbiased estimate.

3. What are the characteristics of a good indicator?

4. What is ρ-value? Explain its use.
5. A case study in a certain country groundnut farmers reported the following data
on the application of inorganic fertilizer on two groundnut varieties, A and B.
The proportions indicate by how much production has increase for each variety.
Use 95% confidence level and ρ or z-value analysis.

Groundnut variety A Groundnut variety B Control

(Chalimbana) (CG7)
p1 60 % p2 40.5 % p3 50.1 %
Sample size, n1 =90 Sample size, n2=50 Sample size, n3=60

a) Formulate appropriate hypotheses

b) Test whether there is significant difference between the applications of
inorganic fertilizer on these groundnut varieties
c) Test if there is any significant difference between the two varieties and
control variety, and
d) Draw conclusion for (b) and (c) above.

6. Discuss Value Chain indicators.

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Africa has both human and natural
resources. These are the ingredients
for development around the globe.
However, what has been leading
Africa to continuously under-develop
is the disconnection between these
ingredients.
-Prof. Abdi-Khalil Edriss

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