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Quantitative Techniques in Business

Mid Term Project

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

Quantitative Techniques in Business


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

Quantitative Techniques in Business

Determinants of GDP in India


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?

Objective of the Study


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.

Quantitative Techniques in Business

Theoretical Model
Imports of
goods and
services (%
of GDP)

Oil Rates
(% of
GDP)

GDP
growth
(annual
%)

Agriculture,
value
added (%
of GDP)

Variables and Their Definitions


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.

Quantitative Techniques in Business


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.

Source of the Data


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

Quality of the Data


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.

Justification of the Method


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.

Quantitative Techniques in Business

Five Figure Summaries and Single Box


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.

Quantitative Techniques in Business


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.

Quantitative Techniques in Business


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.

Quantitative Techniques in Business


Statistics
Agriculture, value added (% of GDP)
N

Valid
Missing

Minimum

43
0
1.751994516935E1

Interpretation

The five figure summary and


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

Quantitative Techniques in Business

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.

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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.

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Quantitative Techniques in Business

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.

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Quantitative Techniques in Business

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.

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Quantitative Techniques in Business

Descriptive Statistics
Descriptive Statistics
Minimu
m

Maximu
m

Mean

Std. Deviation

GDP growth (annual


%)

1.02599 5.45262
5.23818
3.078401894859016E
43
6298901 150205
2703157
0
E1 526E0
E0

Imports of goods and


services (% of GDP)

3.64498 3.073611 1.22655


7.708811397429090E
43 8416072 691711E 442134
0
E0
1 480E1

Oil rents (% of GDP)

8.02896 2.41569 1.07600


43 4072292 8296891 972378
E-2
E0 831E0

.552569092006126

Agriculture, value
added (% of GDP)

1.75199 4.33095 2.85419


7.610989329530753E
43 4516935 7251424 130780
0
E1
E1 229E1

Valid N (listwise)

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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.

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Quantitative Techniques in Business

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.

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