Activity # 5

Q- Identify the types of variables in the given statements as dependent, independent,

conditional, moderating, intervening variables with the help of theoretical framework

i. Household savings having monthly income level Rs 20,000 increases with their monthly
income.
Dependent: Household savings
Independent: Income
Conditional: Income level Rs 20,000

Income Household savings

Income level Rs 20,000

ii. Advertising expenses increase sales which in turn increase profits.

Dependent: Profits
Independent: Advertising expenses
Intervening: Sales

Advertising expenses Sales Profits

iii. Household savings increases with their income by educational level among urban
population.
Dependent: Household savings
Independent: Income
Intervening: Education Level
Moderating: Urban Population

Income Education Level

Household savings

Urban Population

Q- Specify the type of hypothesis and develop the Null and Alternate hypotheses from
the following statements.

i. The average salary of employees in an organization is Rs 15000.

Directional Hypothesis
 Descriptive Hypothesis
H0 = µ = Rs. 15000
H1 = µ ≠ Rs. 15000 / µ < Rs. 15000 / µ > Rs. 15000

ii. The use of fertilizer effects yield of a crop.

Non - Directional Hypothesis
Explanatory / Casual Hypothesis
H0 = Use of fertilizer does not effects yield of a crop.
H1 = Use of fertilizer effects yield of a crop.
iii. The use of fertilizer positively effects yield of a crop.
Directional Hypothesis
Explanatory / Casual Hypothesis
H0 = Use of fertilizer does not positively effects yield of a crop.
H1 = Use of fertilizer positively effects yield of a crop.
iv. Change in advertising expenses leads to change in sales turnover.
Non - Directional Hypothesis
Explanatory / Casual Hypothesis
H0 = Change in advertising expenses does not leads to change in sales turnover. H 1
= Change in advertising expenses leads to change in sales turnover.
v. Change in advertising expenses leads to positive change in sales turnover.
Directional Hypothesis
Explanatory / Casual Hypothesis
H0 = Change in advertising expenses does not leads to positive change in sales turnover.
H1 = Change in advertising expenses leads to positive change in sales turnover.
vi. The average salary packages offered to employees in two organizations are same.
Directional Hypothesis
Descriptive Hypothesis
H0 = Average salary packages offered to employees in two organizations are same.
(µ1 = µ2)
H1 = Average salary packages offered to employees in two organizations are not same.
(µ1 ≠ µ2) vii. Liquidity of a bank is positively related with
profitability of a bank.
Directional Hypothesis
Correlation Hypothesis
H0 = Liquidity of a bank is not positively related with profitability of a bank.
H1 = Liquidity of a bank is positively related with profitability of a bank.
viii. The consumption pattern of families is related to their family size.
Non - Directional Hypothesis
 Correlation Hypothesis
H0 = Consumption pattern of families is not related to their family size. H 1
= Consumption pattern of families is related to their family size.

Q- The researcher wants to study the factors affecting saving and income in small farming
households in Punjab. In this study, two models will be estimated; one is to estimate the factors
affecting income of these small farmers and second is to evaluate the impact of major variables on
savings of these small farmers. In the income model, academic qualification, land holding,
agricultural expenditures and number of family members involved in agricultural activities
affected income of these small farmers significantly whereas in saving model, age, academic
qualification, health expenditures, income of farmer (both from farm and off-farm sources),
number of dependent members and credit installments affected savings of these farmers.

Income = F (Academic Qualification, Land Holding, Agricultural Expenditures and Number of

Family Members involved in Agricultural Activities)

Saving = F (Age, Academic Qualification, Health Expenditures, Income of Farmer (both from
farm and off-farm sources), Number of Dependent Members and Credit Installments)

i- Classify the variables as continuous or discrete.

Income: Continuous Variable
Academic Qualification: Discrete Variable
Land Holding: Continuous Variable
Agricultural Expenditures: Continuous Variable
Number of Family Members involved in Agricultural Activities: Discrete Variable
Saving: Continuous Variable
Age: Discrete Variable
Academic Qualification: Discrete Variable
Health Expenditures: Continuous Variable
Income of Farmer: Continuous Variable
Number of Dependent Members: Discrete Variable
Credit Installments: Continuous Variable

ii- Identify the dependent and independent variables.

Dependent Variable: Income, Saving
Independent Variable: Academic Qualification, Land Holding, Agricultural
Expenditures, Number of Family Members involved in Agricultural Activities, Age,
Academic Qualification, Health Expenditures, Income of Farmer, Number of
Dependent Members and Credit Installments
iii- Develop the Theoretical Framework.

Positive Academic Qualification

Positive Land Holding
Income Negative Agricultural Expenditures
Positive Number of Family Members
involved in Agricultural Activities

Positive Age
Positive Academic Qualification
Saving Negative Health Expenditures
Positive Income of Farmer
Negative Number of Dependent Members
Negative Credit Installments

iv- Develop the hypotheses.

𝑯𝟏𝟏 = Academic Qualification positively affects Income.

𝑯𝟐𝟏 = Land Holding positively affects Income.
𝑯𝟑𝟏 = Agricultural Expenditures negatively affects Income.
𝑯𝟒𝟏 = Number of Family Members involved in Agricultural Activities positively
affects Income.

𝑯𝟏𝟏 = Age positively affects saving.

𝑯𝟐𝟏 = Academic Qualification positively affects saving.
𝑯𝟑𝟏 = Health Expenditures negatively affects saving.
𝑯𝟒𝟏 = Income of Farmer positively affects saving.
𝑯𝟓𝟏 = Number of Dependent Members negatively affects saving.
𝑯𝟔𝟏 = Credit Installments negatively affects saving.