BSc. Economics II students at Mzumbe University were commissioned to conduct a
research on the failure rate of local government projects in Mvomero district council. One of
the terms of reference (TOR) was to apply Probit model to analyze quantitatively so that
they can make inference to the entire population regarding project failurerate in the district.
The summary statistics results for the variables used in Probit model are presented in the
Table below.
Variable MeanStd. Dev Min. Max.
High project failure rate (1 = Yes, 0 = No) 0.576471 0.497001
Age (years)39.6117640.28502575
Gender (1 = male, 0 = female)0.6470590.480701
Education (years of schooling)16.647061.19221318
Inadequate Fund (1 = Yes, 0 = No)0.8741180.163501
Community participation (1=Yes, 0 = No)0.6470590.480701
Change in government priorities (1= Yes, 0 = No)0.6470590.730701
Inadequate human capacity (1 = Yes, 0 = No)0.7488240.476901
Where: high rate of project failure was dependent variable and the rest were independent
variables.
Required:
a)Make interpretation for each variable
b)Briefly but clearly discuss the results for each variable (Hit: Apply measurement concepts
of central tendency and dispersion)
a) Interpretation for each variable:
1) High project failure rate (1 = Yes, 0 = No): This is the dependent variable that indicates whether a project in Mvomero district council has a high failure rate or not. A value of 1 represents a high failure rate, while a value of 0 represents a low failure rate.
2) Age (years): This is the independent variable that represents the age of the individuals involved in the projects. It is measured in years.
3) Gender (1 = male, 0 = female): This is the independent variable that represents the gender of the individuals involved in the projects. A value of 1 represents male, while a value of 0 represents female.
4) Education (years of schooling): This is the independent variable that represents the number of years of schooling completed by the individuals involved in the projects. It is measured in years.
5) Inadequate Fund (1 = Yes, 0 = No): This is the independent variable that indicates whether there is inadequate funding for the projects. A value of 1 represents inadequate funding, while a value of 0 represents adequate funding.
6) Community participation (1 = Yes, 0 = No): This is the independent variable that indicates whether there is community participation in the projects. A value of 1 represents community participation, while a value of 0 represents no community participation.
7) Change in government priorities (1 = Yes, 0 = No): This is the independent variable that indicates whether there has been a change in government priorities that affects the projects. A value of 1 represents a change in government priorities, while a value of 0 represents no change.
8) Inadequate human capacity (1 = Yes, 0 = No): This is the independent variable that indicates whether there is inadequate human capacity for the projects. A value of 1 represents inadequate human capacity, while a value of 0 represents adequate human capacity.
b) Results for each variable:
- High project failure rate: On average, 57.65% of the projects in Mvomero district council have a high failure rate. The standard deviation of 0.497001 indicates that there is some variability among the projects in terms of their failure rates, with some projects having a significantly higher or lower failure rate than the average.
- Age: The average age of the individuals involved in the projects is 39.61 years, with a small standard deviation of 0.28502575. This suggests that the age of the individuals is relatively consistent, with most falling within a narrow range.
- Gender: On average, 64.71% of the individuals involved in the projects are male. The standard deviation of 0.480701 indicates that there is some variability in terms of gender representation, with some projects having a higher proportion of males and others having a higher proportion of females.
- Education: The average number of years of schooling completed by the individuals involved in the projects is 16.65 years, with a small standard deviation of 1.19221318. This suggests that the level of education is relatively consistent, with most individuals having a similar number of years of schooling.
- Inadequate Fund: On average, 87.41% of the projects in Mvomero district council have inadequate funding. The standard deviation of 0.163501 indicates that there is some variability among the projects in terms of their funding status, with some projects having significantly more or less funding than the average.
- Community participation: On average, 64.71% of the projects have community participation. The standard deviation of 0.480701 indicates that there is some variability in terms of community participation, with some projects having a higher level of participation and others having a lower level.
- Change in government priorities: On average, 64.71% of the projects have experienced a change in government priorities. The standard deviation of 0.730701 indicates that there is some variability in terms of changes in government priorities, with some projects being more affected than others.
- Inadequate human capacity: On average, 74.88% of the projects have inadequate human capacity. The standard deviation of 0.476901 indicates that there is some variability among the projects in terms of their human capacity, with some projects having a higher or lower level of capacity than the average.
a) Interpretation for each variable:
1) High project failure rate: This is the dependent variable in the Probit model. It takes a value of 1 if there is a high project failure rate and 0 if there is not.
2) Age (years): This variable represents the age of the individuals being studied.
3) Gender: This variable takes a value of 1 if the individual is male and 0 if the individual is female.
4) Education (years of schooling): This variable represents the number of years of education an individual has completed.
5) Inadequate Fund: This variable takes a value of 1 if there is inadequate funding for the projects and 0 if there is adequate funding.
6) Community participation: This variable takes a value of 1 if there is community participation in the projects and 0 if there is no community participation.
7) Change in government priorities: This variable takes a value of 1 if there has been a change in government priorities and 0 if there has not been a change.
8) Inadequate human capacity: This variable takes a value of 1 if there is inadequate human capacity for the projects and 0 if there is adequate human capacity.
b) Results for each variable:
1) High project failure rate (dependent variable): The mean of 0.576 indicates that, on average, 57.6% of projects in the Mvomero district council fail. The standard deviation of 0.497 suggests that there is quite some variability in the failure rate of projects.
2) Age (years): The mean age of 39.61 suggests that the individuals involved in the study are, on average, around 40 years old. The low standard deviation of 0.285 implies that there is not much variability in the age of the individuals.
3) Gender: The mean of 0.647 indicates that roughly 64.7% of the individuals in the study are male. The standard deviation of 0.481 suggests that there is some variability in the gender distribution.
4) Education (years of schooling): The mean of 16.65 suggests that, on average, individuals in the study have completed around 16 years of schooling. The standard deviation of 1.192 indicates that there is some variability in the number of years of education.
5) Inadequate Fund: The mean of 0.874 suggests that there is a high prevalence of inadequate funding for the projects, with 87.4% of projects facing this issue. The low standard deviation of 0.164 implies that there is not much variability in the funding situation.
6) Community participation: The mean of 0.647 indicates that roughly 64.7% of the projects in the study have community participation. The standard deviation of 0.481 suggests that there is some variability in the level of community involvement.
7) Change in government priorities: The mean of 0.647 suggests that approximately 64.7% of projects have experienced a change in government priorities. The high standard deviation of 0.731 indicates that there is considerable variability in this regard.
8) Inadequate human capacity: The mean of 0.749 indicates that a majority of projects, around 74.9%, face inadequate human capacity. The standard deviation of 0.477 suggests that there is some variability in the human capacity situation.