BSc. Economics II students at Mzumbe University were commissioned to conduct a

Question

research on the failure rate of local government projects in Mvomero district council. One of
the terms of reference (TOR) was to apply Probit model to analyze quantitatively so that
they can make inference to the entire population regarding project failurerate in the district.
The summary statistics results for the variables used in Probit model are presented in the
Table below.
Variable MeanStd. Dev Min. Max.
High project failure rate (1 = Yes, 0 = No) 0.576471 0.497001
Age (years)39.6117640.28502575
Gender (1 = male, 0 = female)0.6470590.480701
Education (years of schooling)16.647061.19221318
Inadequate Fund (1 = Yes, 0 = No)0.8741180.163501
Community participation (1=Yes, 0 = No)0.6470590.480701
Change in government priorities (1= Yes, 0 = No)0.6470590.730701
Inadequate human capacity (1 = Yes, 0 = No)0.7488240.476901
Where: high rate of project failure was dependent variable and the rest were independent
variables.
Required:
a)Make interpretation for each variable
b)Briefly but clearly discuss the results for each variable (Hit: Apply measurement concepts
of central tendency and dispersion)

Answer 1

a) Interpretation for each variable:

1) High project failure rate (1 = Yes, 0 = No): This is the dependent variable that indicates whether a project in Mvomero district council has a high failure rate or not. A value of 1 represents a high failure rate, while a value of 0 represents a low failure rate.

2) Age (years): This is the independent variable that represents the age of the individuals involved in the projects. It is measured in years.

3) Gender (1 = male, 0 = female): This is the independent variable that represents the gender of the individuals involved in the projects. A value of 1 represents male, while a value of 0 represents female.

4) Education (years of schooling): This is the independent variable that represents the number of years of schooling completed by the individuals involved in the projects. It is measured in years.

5) Inadequate Fund (1 = Yes, 0 = No): This is the independent variable that indicates whether there is inadequate funding for the projects. A value of 1 represents inadequate funding, while a value of 0 represents adequate funding.

6) Community participation (1 = Yes, 0 = No): This is the independent variable that indicates whether there is community participation in the projects. A value of 1 represents community participation, while a value of 0 represents no community participation.

7) Change in government priorities (1 = Yes, 0 = No): This is the independent variable that indicates whether there has been a change in government priorities that affects the projects. A value of 1 represents a change in government priorities, while a value of 0 represents no change.

8) Inadequate human capacity (1 = Yes, 0 = No): This is the independent variable that indicates whether there is inadequate human capacity for the projects. A value of 1 represents inadequate human capacity, while a value of 0 represents adequate human capacity.

b) Results for each variable:
- High project failure rate: On average, 57.65% of the projects in Mvomero district council have a high failure rate. The standard deviation of 0.497001 indicates that there is some variability among the projects in terms of their failure rates, with some projects having a significantly higher or lower failure rate than the average.

- Age: The average age of the individuals involved in the projects is 39.61 years, with a small standard deviation of 0.28502575. This suggests that the age of the individuals is relatively consistent, with most falling within a narrow range.

- Gender: On average, 64.71% of the individuals involved in the projects are male. The standard deviation of 0.480701 indicates that there is some variability in terms of gender representation, with some projects having a higher proportion of males and others having a higher proportion of females.

- Education: The average number of years of schooling completed by the individuals involved in the projects is 16.65 years, with a small standard deviation of 1.19221318. This suggests that the level of education is relatively consistent, with most individuals having a similar number of years of schooling.

- Inadequate Fund: On average, 87.41% of the projects in Mvomero district council have inadequate funding. The standard deviation of 0.163501 indicates that there is some variability among the projects in terms of their funding status, with some projects having significantly more or less funding than the average.

- Community participation: On average, 64.71% of the projects have community participation. The standard deviation of 0.480701 indicates that there is some variability in terms of community participation, with some projects having a higher level of participation and others having a lower level.

- Change in government priorities: On average, 64.71% of the projects have experienced a change in government priorities. The standard deviation of 0.730701 indicates that there is some variability in terms of changes in government priorities, with some projects being more affected than others.

- Inadequate human capacity: On average, 74.88% of the projects have inadequate human capacity. The standard deviation of 0.476901 indicates that there is some variability among the projects in terms of their human capacity, with some projects having a higher or lower level of capacity than the average.