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Session 2014-2016

Project Advisor

Miss Khansa Irem

Submitted By

Name

Roll No

Adnan Ali

043

Wajid Ali

019

Haris Amin

040

Mohsin Arshad

054

Master in Commerce

Semester 1st

Superior University

Lahore

Table of Content

Introduction................................................................................................................ 3

Research Question..................................................................................................... 3

Objective of the Study................................................................................................ 3

Theoretical Model............................................................................................................ 4

Variables and Their Definitions...................................................................................4

Dependent Variable.................................................................................................... 4

Independent Variables................................................................................................ 4

Description of Cases................................................................................................... 5

Source of the Data...................................................................................................... 5

Quality of the Data..................................................................................................... 5

Descriptive Analysis................................................................................................... 5

Justification of the Method.......................................................................................... 5

Five Figure Summaries and Single Box Plots..............................................................6

Histograms............................................................................................................... 10

Descriptive Statistics................................................................................................ 14

Conclusion................................................................................................................ 15

Introduction

One of the major areas of research in economics has been to identify factors of GDP. There is

ample literature on the subject matter. These factors differ from country to country. If these

factors can be identified, it can help to accelerate GDP growth rate by focusing on the major

leading sources of growth.

Economy of India had registered growth rate of GDP of 3.7%, 3.0%, 5.8% and 4.6% respectively

in 19601970, 19701980, 19801990 and 19901995. Overall average for the said period is

4.3%. This trend is both important and significant for India. It is because this almost five percent

growth rate is accompanied by growth in the capital stock which approximates around 17 to 18

percent of the GDP. This accumulation of resources shows a trend, that incremental capitaloutput ratio (COR) is low in India than a number of East Asian and South Asian countries.

Existence of this situation justifies a detailed study of the factors, which are responsible for the

moderate growth rate with low capital accumulation.

Research Question

What are the factors which cause the GDP growth rate to change?

The objective of this study is to explore the determinants of GDP growth in India. In this study

time series data on four variables would be used to investigate the dependence of GDP growth

rate on other three variables.

Theoretical Model

Imports of

goods and

services (%

of GDP)

Oil Rates

(% of

GDP)

GDP

growth

(annual

%)

Agriculture,

value

added (%

of GDP)

Dependent Variable

Growth rate of gross domestic product (GGDP): This variable is used as economic growth rate.

Market prices in the terms of local currency are used to measure annual percentage growth rate

of GDP. Year 2000 is the base year to measure the aggregates in the terms of U.S. dollars. GDP

is measured as the sum of gross value added by all domestic producers of India economy

including product taxes and excluding subsidies for the product.

Independent Variables

1. Imports of goods and Services: Imports of goods and services (merchandise trade) are

goods which add to the stock of material resources of a country by entering its economic

territory.

2. Oil rates or rents: Oil rents are the difference between the value of crude oil production

at world prices and total costs of production.

3. Agriculture, value added: Value-added agriculture refers most generally to

manufacturing processes that increase the value of primary agricultural commodities.

Description of Cases

A sample period of 43 years has been selected for this study for the period of 1970-2012 with

annual frequency. Years for the said period would be used as cases. So we have 43 cases.

http://data.worldbank.org/data-catalog/world-development-indicators

Quality of the data is up to the mark. No value of any variable is missing. Data source is

reliable. All of the independent variables have the theoretical explanations of the effects on the

GDP growth.

Descriptive Analysis

We used the Five Figure Summaries, Single Box Plots, Histograms and Descriptive Statistics to

show the relationship between dependent and independent variables.

Table of summary

statistics is also included in the report to display the overall picture of the variables.

Keeping the objective of the study in mind, Five Figure Summaries, Single Box Plots,

Histograms and Descriptive Statistics present the idea about the relationship between dependent

and independent variables.

Plots

Statistics

GDP growth (annual

%)

N

Valid

43

Missing

Minimum

-5.238182703157E0

Maximum

1.025996298901E1

Percentile 25

s

50

3.84099115692911E0

5.53345456338035E0

75

7.57449184073531E0

Interpretation

The five figure summary and single box plot of GDP growth shows that the

data of all the 43 years is available. No value is missing. The minimum GDP

growth rate is -5.24, maximum GDP growth rate is 1.03, lower quartile is

3.84, upper quartile is 7.57 and median is 5.53. The single box plot shows

the outlier. It means there are extreme values in the data.

Statistics

Imports of goods and services (% of GDP)

Valid

43

Missing

Minimum

3.644988416072E0

Maximum

3.073611691711E1

Percentile 25

s

50

6.90201014544465E0

75

1.49815485883645E1

9.08569056406568E0

Interpretation

The five figure summary and single box

plot of imports of goods and services shows that the data of all the 43 years

is available. No value is missing. The minimum Imports of goods and

Services in percentage of GDP are 3.64, maximum Imports of goods and

Services in percentage of GDP are 3.07, lower quartile is 6.90, upper quartile

is 1.5 and median is 9.09.The single box plot shows the outliers. It means

there are extreme values in the data.

Statistics

Oil rents (% of GDP)

N

Valid

43

Missing

Minimum

.080289640723

Maximum

2.415698296891E0

Percentile 25

s

50

.76701246503233

.98955211453191

75

1.30649758510833E0

Interpretation

The five figure summary and single box plot of oil rents shows that the data

of all the 43 years is available. No value is missing. The minimum oil rents in

percentage of GDP are 0.08, maximum oil rents in percentage of GDP are

2.42, lower quartile is 0.77, upper quartile is 1.31 and median is 0.99. The

single box plot shows the outliers. It means there are extreme values in the

data.

Statistics

Agriculture, value added (% of GDP)

N

Valid

Missing

Minimum

43

0

1.751994516935E1

Interpretation

Percentile 25

2.07427547013895E1 single box plot of Agriculture, value

added shows that the data of all

s

50

2.89708505195301E1 the 43 years is available. No value

75

3.40687991959989E1 is missing. The minimum

Agriculture, value added in GDP

percentage is 1.75, maximum

Agriculture, value added in GDP percentage is 4.33, lower quartile is 2.07,

upper quartile is 3.41 and median is 2.89.

Maximum

4.330957251424E1

Histograms

Interpretation

In this figure the frequencies shown by the bars are for a range of points (In

this case SPSS selected the range of 5) notice that the largest number of

GDP Growth (about 10) had scored in the middle bar. Similar small number

of GDP Growth has very low and very high scores. The bars in the histogram

form a distribution (pattern or curve) that is similar to approximately

normally distributed. Thus, the frequency distribution of the GDP Growth is

said to be approximately normal.

10

Interpretation

In this figure the frequencies shown by the bars are for a range of points (In

this case SPSS selected the range of 10) notice that the largest number of

GDP Growth (about 20) had scored in the third bar from left. Similar small

number of GDP Growth has very low and very high scores. The bars in the

histogram form a distribution (pattern or curve) that is similar to

approximately normally distributed. Thus, the frequency distribution of the

GDP Growth is said to be approximately normal.

11

Interpretation

In this figure the frequencies shown by the bars are for a range of points (In

this case SPSS selected the range of 0.5) notice that the largest number of

GDP Growth (above 12.5) had scored in the middle bar. Similar small number

of GDP Growth has very low and very high scores. The bars in the histogram

form a distribution (pattern or curve) that is similar to approximately

normally distributed. Thus, the frequency distribution of the GDP Growth is

said to be approximately normal.

12

Interpretation

In this figure the frequencies shown by the bars are for a range of points (In

this case SPSS selected the range of 5) notice that the largest number of

GDP Growth (about 9) had scored on the left side. Similar small number of

GDP Growth has very low and very high scores. The bars in the histogram

form a distribution (pattern or curve) that is similar to approximately

normally distributed. Thus, the frequency distribution of the GDP Growth is

said to be approximately normal.

13

Descriptive Statistics

Descriptive Statistics

Minimu

m

Maximu

m

Mean

Std. Deviation

%)

1.02599 5.45262

5.23818

3.078401894859016E

43

6298901 150205

2703157

0

E1 526E0

E0

services (% of GDP)

7.708811397429090E

43 8416072 691711E 442134

0

E0

1 480E1

43 4072292 8296891 972378

E-2

E0 831E0

.552569092006126

Agriculture, value

added (% of GDP)

7.610989329530753E

43 4516935 7251424 130780

0

E1

E1 229E1

Valid N (listwise)

43

Interpretation

In this table of descriptive statistics there are four main columns of minimum

values, maximum values, mean values and standard deviation. Minimum

values for GDP growth, Imports of goods and services, Oil rents and

Agriculture, value added are respectively -5.24, 3.64, 8.03 and 1.75.

Maximum values for GDP growth, Imports of goods and services, Oil rents

and Agriculture, value added are respectively 1.03, 3.07, 2.42 and 4.33. In

the column of mean values highest mean value is 5.45 for the variable of

GDP growth and lowest mean value is 1.08 for the variable of Oil rents.

Lastly the values of Standard Deviation for GDP growth, Imports of goods

and services, Oil rents and Agriculture, value added are respectively 3.08,

7.71, 0.55 and 7.61.

14

Conclusion

Minimum values for GDP growth, Imports of goods and services, Oil rents

and Agriculture, value added are respectively -5.24, 3.64, 8.03 and 1.75.

Maximum values for GDP growth, Imports of goods and services, Oil rents

and Agriculture, value added are respectively 1.03, 3.07, 2.42 and

4.33.Which shows that from 1970 to 2012 GDP Growth rate in India has

fluctuated between -5.24 and 1.03. This fluctuation was due to change in

three independent variables i.e., Imports of goods and services, Oil rents and

Agriculture, value added.

15

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