ECN5132

Research Methodology in Applied Economics

LECTURE

Why Study
Research Methods?

Introduction to Research
Methods

Some of the famous answers

Some of the famous answers

to get my degree

So that I can evaluate what I see or hear

So that I can do decent thesis

So that I can do research in my work as a

researcher

So that I can kill two birds with one stone

taking research methods and thesis

So that I can understand the philosophy of
science

So that I can read or evaluate other
peoples research reports

Research is
To satisfy curiosity
To provide information to guide decisions &
to solve problems

Some examples:
a. Suppose that your dad seek advice on whether he should
invest in a property markets in Malaysia. What you can
do?

WHAT IS
R-E-S-E-A-R-C-H?

b. When a non economics background friend ask about the

impact of the 1997 crisis to Malaysia, what is your
answer?
c. As a worker unions president, you are requested to
present a proposal on the effects of imposition of
minimum wage.

All these challenges require you to evaluate options,

understand processes or predict the future. How you
going to do that? By conducting a RESEARCH.

Definitions of research
Definitions of research

Research is a systematic, formal rigorous and precise

process employed to gain solutions to problems and/or
to discover and interpret new facts and relationships.
(Waltz and Bausell, 1981, p.1).

Research is the process of looking for a specific

answer to a specific question in an organised objective
reliable way (Payton, 1979, p.4)

Research is systematic, controlled, empirical and

critical investigation of hypothetical propositions about
the presumed relations among natural phenomena
(Kerlinger, 1973, p.1).

a process of searching and researching of

new knowledge.
making critical and precise inquiry or
investigation with full attention to obtain
principles and facts in order to determine or
to answer certain question or problem.
[Websters New International Dictionary]

Definitions of research
an activity that is orderly, systematic, based on
facts, critical and scientific investigation to
obtain answers or solution to specific
problems.
must use scientific method that focus on
existing or newly created theory. The scientific
method involves systematic and objective
steps for studying something because it
involves carefully planned procedures and
detailed analyses.

Definitions of research

In summary, research is an orderly

way of obtaining new knowledge. It is
an activity related to effort to obtain
and analyze information to identify
and solve problems. The output of
research is new knowledge.

Importance of Research
Provide direct benefits to knowledge workers, in terms of:
 new knowledge

Why Do Research?

 new and more efficient technologies and methods

 better and improved methodologies.
To overcome problems faced
New knowledge provides benefits to mankind e.g.
increase food production, reduce the work load of human
labor, reduce crime rate in cities, or accelerate growth of
an economy, etc.

Research teaches


Research teaches methods of discovery



You will understand the different views on a subject

Research teaches logic



Research teaches investigative skills



Research teaches

You will discover additional methods of investigation

Research teaches critical thinking




You will learn to discriminate between useful

information & unfounded or ill-conceived comments.
Journal vs Internet undocumented opinions

Your paper & your readers will rely on your logical

response/decisions to your reading, observation,
interview and testing.

Research teaches the basic ingredients of

argument


In most cases, a research paper requires you to make

a claim and support it with reasons and evidence.

What Is Scientific Research?

What Is Scientific
Research?

To do research is to investigate the

problem systematically, carefully and
thoroughly.

This would requires the researcher
follow a process, a sequence of steps
from formulating the research problem
to publishing the results. This process
is called the scientific method

What Is Scientific Research?

A process is a series of
operations or actions that brings
about an end result.

A careful study conducted in the best possible

way by scientific means to arrive at objective,
unbiased and reliable solutions.
 The methods and logic of inquiry through which
scientific knowledge is created, tested and
refined.

The analysis and interpretation of empirical
evidence
(facts
from
observation
or
experimentation) to confirm or disprove prior
conceptions..
conceptions


Albert
Einstein
repeatedly
emphasized that science must
start with facts and end with
facts, no matter what theoretical
structures it builds in between.

i.e. in a scientific process,
scientists are observers recording
facts, next they try to describe
and explain what they see, then
they make predictions on the
basis of their theories, which they
check against the observations
again.

Steps in Scientific Method

Characteristics of scientific research

Research must be conducted with:
a. Clear purpose
b. Relevance
c. Timely
d. Efficiency
e. Rigour
f.
Quality Accurate, Reliable & Valid
g. Objectivity
h. Ethical








Assessment of relevant existing knowledge of a

phenomenon
Formulation of concepts and propositions
Statement of hypotheses
Design of research to test the hypotheses
Acquisition of meaningful empirical data
Proposal of an explanation of the phenomenon
and statement of new problems raised by the
research

Classification of Economic
Research

Social Science and Economic Research

Economics, as a sub-discipline of social
science, is related to how human manage
and distribute limited resources to fulfill
unlimited wants.
Economic research focuses on areas
includes macroeconomics,
microeconomics, political, resource and
agricultural, institutional economics, health
economy, industrial, econometrics etc.

Classification of Economic
Research
1. Basic Research
 Stresses on the creation of knowledge for
knowledge sake.
Usually focus on detailed studies on theory
 i.e. to obtain empirical data for constructing,
developing and evaluating theory. This type of
research is not oriented to solve practical
problems.


1.

2.

Basic Research/Fundamental
Research/Pure Research
Applied Research

Classification of Economic
Research
2. Applied Research
 To solve a current problem
 Research that with the intention of
applying the results to solve the problem
 Concerned with finding solution to
practical problems and putting these
solutions to work

Classification of Economic
Research


Both types of research complement each

other.



Applied research will based its theory obtained

from basic research.
On the other hand, basic research depends on
the results of applied research in constructing
complete theory.

Purpose of Research
Reporting: provide an account or
summation if data and conclusion drawing
 Descriptive study: Discover answers to the
question who, what, when, where, and,
sometimes, how
 Explanatory: attempts to explain the
reasons for the phenomenon


Your Research Project

 Assignment

Research Process

is to conduct an
independent analysis that seeks to
answer a research question.
question.
 What

does this mean?

Whats an Independent
Analysis?

Whats a Research Question?

A

good research question has

several characteristics, but
fundamentally it is:
question, the answer to which is
unknown or in doubt.




A

You collect information or data needed to

answer the research question.
You apply a method of analysis that would
reasonably be expected to generate an
answer based on the information.
You evaluate the information



Conducting an Independent
Analysis

Weigh the evidence

Consider the quality or uncertainty of the evidence

You draw conclusions supported by this

analysis

Research Steps

The simplest way to conduct an

independent analysis is to choose a
research question that lends itself to a
statistical test of a hypothesis.
 Less quantitative approaches make it
harder to


Credibly demonstrate independence of work

 Reach clear conclusions


But nonnon-quantitative approaches that seek

to answer a research question or solve a
research problem are acceptable, as long
as the analysis is your own.

Research Steps


The first step is preparing for research.








This is the step where you brainstorm ideas and possible sources
of information;
narrow your topic to make it manageable; and
plan how you are going to do your research.

The second step is accessing resources.



Research Steps

This is the step where you decide what sources of information

will be best;
find them; and
locate the information in them that might be helpful in answering
your information question.

The third step is processing information.




This is the step where you look closely at the information from
your sources; decide what is important; and take notes.
Then you organize your information; make sense of it; and
develop your own ideas about it.

The fourth step to successfully solving your information

problem is to transfer your learning.


This is the step where you take your ideas and the information
that helped you come to them and plan, create and present to
other people, your findings and solutions.

Adopted from http://www3.sympatico.ca/sandra.hughes/sandra.hughes/research/researchs.html

Adopted from http://www3.sympatico.ca/sandra.hughes/sandra.hughes/research/researchs.html

Overview of the Research

Process in Economics


Researchers in Economics, as a social

science, use a version of the scientific
method..
method

The scientific method is a set of

procedures for drawing valid, reliable, and
objective conclusions.

Scientific Method
Procedures
Select a scientific Problem or question;
 Apply a theory to derive a hypothesis
about the problem or question;
 Test the hypothesis by comparing its
predictions to evidence from the real
world;


Stages of Economic Research

Scientific Method
Procedures
If the hypothesis fails the test, modify it
(and retest) or reject it;
 If the hypothesis passes the test,
provisionally accept it; and
 Test the hypothesis in a new context.


Stages of Economic Research

Stages of Economic Research
Stage 1: Formulation of the Research Problem
Research begins with a question or problem.
problem.

Stage 2: Preparation of Research Design

Once the problem has been clearly formulated, the researcher must
develop an overall plan or framework for the investigation
investigation..

The researcher must anticipate all the subsequent stages of the

research project, including:
including:

From a general idea, one must decide more

specifically what one wants to know and for what
purpose one wants to know itit..
The best ideas on how to refine the problem are
from literature review.
review.

a.

What sorts of observations are needed to solve the research

problem?

b.

What strategy is appropriate for obtaining the observations? e.g.

experiment, survey, field research, secondary data etc.
etc.

c.

What is the unit of analysis, what are the relevant variables and how
they are measured?

d.

How best to analyze the data?

Thinking through all these in advance in the research design stage

should prevent serious mistakes and omission in a study
study..

However, not all problems can be foreseen and many of these

decisions at the design stage will be arbitrary and subject to change
change..

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Stages of Economic Research...

Stages of Economic Research

Stage 3: Measurement

Stage 5: Data Collection/ Data Preparation

Involves devising operations that will link specific concepts

to empirically observable events
events..

Obtain the observations for the research

research..

Stage 4: Sampling
Determine how many units should be selected and how to
go about choosing them
them..
a.

How will we select them?

b.

Why will we select them?

c.

Note:: even for qualitative research we need to identify

Note
the participants/respondents and justify

a. How

data is collected?

b. How

it is recorded?

Stage 6: Data Processing

The data obtained from stage 5 must be transformed
or processed for analysis to be carried out
out..
a. How data is analysed
b. Interpretation of findings to arrive at conclusions

A version of Stages of Research (general)

Stages of Economic Research

Problem Discovery
and Definition

Problem
discovery
Sampling

Stage 7: Data Analysis and Interpretation

The processed data must be manipulated further so that their

meaning and implications on the problem and hypotheses can
be extracted.

Selection of
exploratory research
technique

Secondary
(historical)
data

Experience
survey

There are many types of analysis, mostly involve statistical tests

and also develop the causal relationships.
Having analyzed the data, one draws conclusions about the
hypotheses and theory, and assesses the practical implications
of the findings.
Finally, reports the results. Oral presentation of the research
results to the audiences.

Probability

Pilot
study

Case
study

Data
Gathering
Data
Processing
and
Analysis

Problem definition
(statement of
research objectives)

Research Design

Conclusions
and Report

Survey
Field

Interview

Nonprobability

Collection of
data
(fieldwork)
Editing and
coding
data
Data
processing

Selection of
basic research
method

Experiment
Laboratory

Selection of
exploratory research
technique

Questionnaire

Observation

Secondary
Data Study

Interpretation
of
findings

Report

Originally adopted from William G. Zikmund (2000)

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Steps of the Research

Process for Economics

Steps of the Research

Process for Economics

1.
2.
3.
4.
5.

Developing an Effective Research Question;

Surveying the Literature on the Topic;
Analyzing the Issue or Problem;
Testing your Analysis;
Interpreting the Results and Drawing
Conclusions; and
6. Communicating the Findings of the Research
Project.

A research project is not a linear process.

The steps are overlapping and iterative.



Instead of completing the steps one by one

until the end, often research finds it necessary
to return to an earlier step in the process as
he/she revises his/her thinking.

Greenlaw: ch02

For examples


Though you need to begin thinking about the

research question early in the process (Step
1), after you have reviewed what other
scholars have done in the area (Step 2) you
may need to revise the question.
In determining how to perform the empirical
testing (Step 4), you may need to consult
previous testing methodologies (Step 2).

For examples


Lack of adequate data for testing (Step 4)

may require you to rere-conceptualize the
problem (Step 3) in a way that is testable.

Begin writing the research report (Step 6) as

you progress through the research process,
while the various steps are fresh in mind,
rather than waiting until the end.

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