Chapter One

Introduction

BACKGROUND OF THE STUDY

Education is one of the fundamental components of human capital that used to enhance the
quality of human life and ensuring social and economic progress of one’s country. According to
Todaro and Smith (2011), education can be seen as both an objective and component of
development, as well as “fundamental to the broader notion of expanded human capabilities
that lie at the heart of the meaning of development”. This suggestion implies that critical
investigation on educational situations and effective educational policies are crucial for the
development of a society. Among this situation that need critical investigation, evaluating the
performance of Education at its different level is the important one.

However, this paper will give due emphasize specifically on the evaluation of performance of
higher education. UNESCO considers higher education as a term that comprises all post-
secondary education, training and research guidance at education institutions such as
universities that are authorized as institutions of higher education by state authorities.

As college students are one major components of higher education, evaluation of performance
of higher education can be done through investigating factors that determines college
performance of students in higher education.

Measuring of academic performance of students is challenging since student performance is

product of socio-economic, psychological and environmental factors. School environment,
Individual and family back ground, parents' income and educational level, Students working
(studying) hour, student's income are some factors that have direct or indirect impact on the
performance of students. In accordance with all factors affecting student's performance, the
researcher would like to give the highest emphasis to student's income level and its
contribution to their college performance.
 Chapter Three: Data and methodology

3.1 Introduction

The education sector in Ethiopia has been facing problems ever since it came into function. In
the previous governments, both in the Imperial as well as the Dergue regimes, a considerable
emphasis has not been given for the problems that were encountered by higher education. The
first problem being the internal inefficiency of the education system, which is characterized by
extremely high dropout rate. Poor quality in the Education system which retains instructors with
unsatisfactory qualification and availability of resources are also other problems that exist within
the Ethiopian Higher Education. There also exists external inefficiency which incorporates
problems related to the educated human resource supply and employment opportunities similar
to what happened in the late 1980's. Employment opportunities have direct impact on students'
valuation of education. When the labour market for educated (college graduates) is inefficient,
which means when the market fails to accommodate college graduates, students will not have
motivation to perform well in college. Low performance of students attributes to low quality
outcome of education. Apart from employment, there are so many factors such as family
backgrounds and students' personal affinity towards educationn which has a direct impact on
students' valuation of education.

3.2. Data Source and Methodology The data utilized in this study were collected from students
in AAU, Faculty of Business and Economics, which registered, in the academic year 2008/09, a
total enrolment of 2,680 at undergraduate level in both regular and extension programs. The
sample for this study excluded freshman students since we cannot apply cumulative GPA as a
measure of educational performance for such students. Extension and post graduate students
were also excluded from the sample because most students in these programs are typically older
and matured than regular undergraduate students. In addition most of them earn sufficient
income to support themselves which is not a similar case when it comes to regular undergraduate
students. Hence exclusion of extension and postgraduate program students can enable the study
to examine the problem on similar grounds. Thus the final population size consists of around 700
individual students i.e. graduating and third year students in the four departments of Faculty of
Business and economics. To investigate the effects of different factors on college performance,
101 questionnaires were distributed to students enrolled in the four departments of faculty of
business and economics. To keep the randomness, the questionnaires were distributed to students
while they were following classes. Giving emphasis on students' income level, the questionnaire
survey attempted to gather information on basic factors influencing cumulative GPA by raising
20 relevant questions. While conducting the survey, failure on the side of the respondents to
provide the correct answer posed as a major problem. The researcher has tried to tackle this
problem by reassuring the respondents about the confidentiality of the survey. In analyzing the
data, the variables included in the questionnaire are assigned to be the explanatory variables to
the performance variation distribution of education opportunity is also a significant problem
u(CGPA). As can be observed in the literature review or model specification of this study, all
explanatory and dependent variables are continuous. Hence, by utilizing econometric analysis,
data processing is done using simple Ordinary Least Squares (OLS) econometric estimation
model. The STATA version 9 software is utilized by the researcher for this reason.

3.3 Model Specification and Expected Results

The literature section of the paper has incorporated different economic theories which reflect
relationships between the dependent and independent variables in the regression model.

3.3.1. The Dependent variable

Students' educational achievement /performance/ was taken as dependent variable in the

regression model. Based on concepts discussed in the literature, students' cumulative grade
point average (CGPA) is used as a proxy measure of educational performance.

3.3.2. The Explanatory Variables

Different arguments and explanations that were discussed in detail in the literature review
facilitated the identification of the explanatory variables of the model. The researcher believes
that these variables can best explain the difference in school performance across students. The
explanatory variables can be broadly classified in to the following five categories: students'
monthly pocket money, family income, students' age, Students studying hour and, parents'
educational level.
After giving the above explanation about the dependent and independent variables, the model
can be presented as follows:

CGPA= βo +ß1 Smpm+β2 Fi+ β3 Sa +β4 Ssh+β5 Pel + Ui

Where; CGPA= cumulative grade point average, Sa= student’s age

Smpm= students' monthly pocket money, Ssh= Students studying hour

Fi= family income, Pel = parents' educational leve

Ui= the error term

Ordinary Least Square (OLS) method for cross sectional data is used for estimating the above
model

1.7 DATA SOURCE AND METHODOLOGY

1.7.1 SOURCE OF DATA

In this st6udy a cross sectional data will be used. According to Wooldridge a cross sectional
data set consists of sample of individuals at a given Pointe in time. As the study entirely
depends on data’s obtained from sample of individual's use of this data set is appropriate
using random sampling technique samples will be drawn from faculties of business and
economics (FBE) and from few selected faculties in the Maine campus of AAU. The data
collection considers all AAU's students who have complicated one semester and above. This
will be done to capture the desired variation of variables under question.
The researcher planned to use questionnaires as a tool, to collector information on the
variables of the study most of the time a closed question format is used to reduce the
difficulty in coding and analyzing and to assure mutual exclusiveness.

1.7.2 METHOD OF ANALYSIS

In analyzing organizing and interpreting the data; tables Graphs different tactical techniques
(mean valance. Correlation) and econometric models will be the important instruments. But
econometric model should be the major instrument in analyzing data to hit the central goal
of this study and the model specification will be as follows. The first step in an empirical
analysis is specifying economic model which consists of mathematical equation that
describes various relation ship and the following is to represent the economic model

A) CGPA = f(pcmon, satres, prob, age, punc, female)

B) CGPA= B. +B1 pcmon +B2 satres + Bß3 prob +B4 age +B5 punc +B6 female +B7U

Where:

CGPA= cumulative grade point average

Pcmon = students' monthly pocket money

Satres = students' Scholastic Aptitude test scores

Prob = problems faced by students Age = students' age

Punc = punctuality of students in attending classes

Female = dummy variable accounting for female students

U = the error term

Ordinary Least Square (OLS) method for cross sectional data is used for estimating the
above model.
3.1. The Research Design

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