Research Methodology in

Applied Economics

Israa A. El Husseiny
 Steps of the Research Process
2

1. Identify research area

2. Narrow it down to a specific phenomenon and develop a relevant

research question

3. Literature review/Determine hypothesis

4. Identify appropriate methodology

5. Collect data

6. Analyze data/Test the hypothesis (if applicable)

7. Report and interpret the results

Amirah El-Haddad, Research Methods 2010 and Hoda

Selim, Research Methods 2012
 Flowchart of a Search and Research
Strategy
3

The following steps are reiterative and interdependent

Hoda Selim, Research Methods 2012

‫العملية البحثية وخطوات البحث العلمي‬
‫‪4‬‬
 Selection of topic
5

• Identify main research area

1

• Narrow it down to a more

2 specific topic

• Formulate research question

3
Selecting a topic (cont.)
6

 Choose a general topic (research area)

 Social problems in your society

 Personal interests
 Journal of Economic Literature (JEL) Classification System
 https://www.aeaweb.org/econlit/jelCodes.php?view=jel

 Examples of general problem/area

Unemployment; economic growth; pollution; poverty; inflation; fiscal policy; government
expenditure; education finance; taxation, .., etc.

 General problems cannot be addressed in individual papers.

Based on Hoda Selim, Research Methods 2012

JEL. Classification Codes

7
JEL. Classification Codes (cont.)
8
JEL. Classification Codes (cont.)
9
JEL. Classification Codes (cont.)
10
JEL. Classification Codes (cont.)
11
Selecting a topic (cont.)
12

 The next step is to narrow the general topic down to a

specific topic

 Exercise: Suggest specific topics to the following general

topics:

 Unemployment
 Inflation
 Fiscal deficit
 Economic growth
Selecting a topic (cont.)
13

 The next step is formulate a research question

1. What is the research topic?

2. What is the research question?

o One-sentence question

3. What is the research hypothesis?

o Proposed answer to your question

Hoda Selim, Research Methods 2012

Research question
14

How to select a research question?

 Start reading the literature in a research area

 What has been done
 What questions remain
 Are there contradictions in the literature

 Select a research question from the gaps in the

literature

Hoda Selim, Research Methods 2012

Research question (cont.)
15

 How to find the gaps in the literature

 Introduction to articles
 Every article will identify the research question and how it
differs from other research in the introduction

 Conclusion of articles
 Every article should list its weaknesses and areas for further
study in the conclusion

Hoda Selim, Research Methods 2012

 Research question (cont.)
16
Good research questions should:

 Express relationships between two or more variables

 Must be specific and clear

 Must appear/ be reflected in the title of your paper

 Time frame

 Examples:

 What is the potential impact of a Free Trade Agreement with the EU on the Egyptian Textile Industry during
the period…………..?
 What is the relative effectiveness of monetary and fiscal policies on output growth in Egypt during the
period….?
 Budgetary institutions and fiscal performance in Egypt: Is there a link?
 Inflation in Egypt: A fiscal or monetary phenomenon?
 The cyclical behavior of fiscal policy in Egypt: Countercyclical or procyclical?
 What are the leading sectors that drive economic growth in Egypt during the period…..?

Based on Hoda Selim, Research Methods 2012

 Examples
17

• Financial Economics
1

• Banking performance
2
• To what extent does interest rate spread affect bank
profitability?
• What is the impact of Basel II regulations on bank
3 performance?
 Examples (cont.)
18

• Public Finance
1

• Subsidy policy; management of government debt;

2 tax policy & VAT; fiscal deficit; fiscal policy
• How is subsidy reform affecting the poor?
• Is using privatization revenues to pay debt service the most
efficient utilization of resources?
• Does VAT increase tax revenues?
3 • Are expenditure cuts needed to bring down Egypt’s fiscal
deficit?
• How does fiscal policy react to business cycles?
 Examples (cont.)
19

• Labor Economics
1

• Unemployment
2
• Do the determinants of unemployment differ
according to gender?
• Do the determinants of unemployment differ
3 according to the level of education?