The Conceptual

Framework
Lecture 8

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Organization of this lecture
Conceptual Framework:
Role of the Conceptual Framework
Theory: Source of Conceptual
Framework
Hypotheses and Hypothesis Testing
Operational Suggestions

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“Economics is the science of thinking in
terms of models joined to the art of
choosing models which are relevant to the
contemporary world. Good economists
are scarce, because the gift of using
‘vigilant observation’ to choose good
models … appears to be a very rare one.”
John Maynard Keynes

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• Although a conceptual framework may not always be required in a research
proposal, no economic research should start without developing one.
• There is more misunderstanding and confusion about the conceptual
framework than any other part of a research proposal (or project).

– What is it?
– What is the purpose?
– How is it approached?
• It is an integral part of understanding and analyzing the research problem

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 A clear statement of the research problem often does not occur until the
conceptual framework is developed.
 It should be considered “complementary” to the problem description,
statement of objectives, and literature review, rather than a “fourth step”.
 The reasoning in the conceptual framework runs through the whole proposal.

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 The conceptual framework is often neglected, or done hastily and
inadequately
 Reasons for this might be that it requires complex reasoning and abilities
 Abstract reasoning
 Recognition and synthesis of central points
 Knowledge of existing relevant theory
 Understanding the details of a problem and the surrounding issues
 It is hard work and often frustrating

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 Another reason the conceptual framework is overlooked is that researchers
often want to get on with “real research” instead of “theorizing” (especially
in subject-matter and problem-solving research)
 However, failure to conceptualize while planning, may actually slow down
the research, or can lead to fatal errors in design, procedures or
interpretation.

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 Role of the Conceptual Framework

• Concepts are generalizations. In economics, a

concept is “a logical, mental construction of
one or more relationships”.
• Concepts are inherently abstract and are
based on logic and reasoning. In economics,
concepts typically focus on relationships
between variables.
• The primary purpose of the conceptual
framework is to lead to hypotheses that are
subject to testing 8
 The conceptual framework may be viewed as an analysis of the research
problem using theory.
 Economic theory will be used, and possibly theories from other disciplines
as well.
 The theories are identified and then used in a conceptual analysis of the
specific research problem

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 Source Material for the Conceptual
Framework: Theories
• Which theory is relevant? The relevant
theory will provide insights into one or
more of the following issues:
– Sources of the research problem
– Possible solutions to the problem
– Relevant variables
– Relationships involved in analyzing the
problem
– Hypotheses to be tested
(Williams, 1984)
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• For example – if one is interested in the problem of water use efficiency of
the Nile river in Egypt:
– The general theory of the efficiency in use of a limited, but replenishable
resource would be used
– The theory would be adapted to the particular natural resource (water) and place
(Egypt), in its various uses (agricultural, domestic, industrial)
• In this example, it is also likely that Egyptian policy would need to be
considered

eg. Egypt has a policy of free water for

agriculture, which affects water use efficiency

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 Sometimes, there is no existing theory sufficient to analyze the research
problem.
 In this case, one can either develop or refine a theory, or simply identify the
gap and present an incomplete conceptual framework
 This latter option of proceeding without an adequate theoretical basis, might be
defensible in an MS thesis, but probably not in a PhD dissertation or in
professional research

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Hypotheses and Hypothesis Testing

• A primary function of the conceptual

framework is to lead to hypotheses
relevant to the research problem.
Hypotheses result from the reasoning done
in the conceptual framework.
• Hypotheses need to be testable and
refutable.
• Hypotheses are tentative assertions that
are subject to testing.
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• Hypotheses can take the form of a simple proposition of an expected
outcome, or can assert the existence of a relationship. eg.
– A simple proposition might be that one production system, based on a particular
technology is more profitable than another production system based on another
technology
– A hypothesis of a relationship could be that in demand for wine in the US, the per
capita consumption of wine is affected by price of wine, the price of other
beverages, per capita income, religious affiliation, and ethnic background

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 Quantitative hypotheses are subject to empirical testing, the most common
form being a statistical test. Four characteristics facilitate this:
1) They must be stated in specific terms
2) Appropriate data must be available
3) Analytical techniques must be available
4) There must be a conceptual basis (without which quantification only shows
association, not causation).

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• Qualitative hypotheses can be of three types (as introduced in Lecture 3)
1. Maintained hypotheses (assumed) often take the form of assumptions we make
on conditions in which the problem exists. eg. The commodity production
segment in agricultural may be assumed to be competitive
2. Diagnostic hypotheses deal with the causes of a problem. eg. A country’s chronic
trade deficit may be hypotheses as due in part to foreign investment policy and
commodity price ceilings.
3. Remedial hypotheses, which deal with solutions to problems, are optional since
they are so closely related to diagnostic hypotheses

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 Three difficulties people often have in developing hypotheses are:

1. Absence of a clear theoretical framework

or absence of theory
2. Inability to use the framework logically to
see the hypotheses within
3. Failure to understand research techniques
that allow the hypotheses to be tested

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 Operational Suggestions

• Keep a clear focus on the primary purpose

of the conceptual framework – to analyze
the research problem.
• A good way to start is to use simple
conceptual models, and then build on
them to the complexity and sophistication
necessary.
• This can be a useful approach for all kinds
of research, policy analysis, and problem
solving.
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The following steps may be useful in developing
the conceptual model:
1) Study the research literature related to your
problem. How have others conceptualized
problems similar to yours? Are their conceptual
analyses adaptable to your framework?
2) Reduce the problem to the simplest set of
conditions. Sometimes you can “assume away”
parts of a complex problem to gain an initial
understanding.
3) Identify applicable economic theory. Consider a
wide range of economic theories in selecting the
most appropriate.
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4) Start with a “base model” analysis. Based on
your literature review and basic assumptions,
start with a simple model (statistical,
graphical, mathematical …)
5) Expand the base model to other relevant
dimensions of the problem. Alter and relax
assumptions, then reanalyze the problem. This
will likely make the model more complex, but
remember, the goal is not complexity, but
rather, accurately addressing the problem.
6) Assemble relevant, testable hypotheses from
the conceptual analysis.
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 Conceptual frameworks go by many
names; “model”, “conceptual model”,
“conceptual considerations”, “theoretical
considerations”, etc.
 Sometimes it is simply integrated into the
problem description, but in academic
proposals, conceptual frameworks are
usually presented in a separate section.

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