Introduction to Data Management Using Econometric Views (E-Views) Computer Software for Students of Social and Management Sciences

Introduction to Data Management Using Econometric Views (E-Views) Computer Software for Students of Social and Management Sciences By Mustapha Muktar, PhD Department of Economics Bayero University, Kano-Nigeria mmukhtar.eco@buk.edu.ng and muktaronline@gmail.com http//:www.mustaphamuktar.blogspot.com Introduction There are several software or packages for undertaking rigorous analysis. These include the Statistical Package for Social Sciences (SPSS), PC GIVE, MICROFIT, STATA and E- VIEWS as major and commonly known ones. The focus here is on E-Views. E- Views provide sophisticated data management and analysis tools on window based computers. With E- Views one can easily develope a statistical relation from a set of data and then use the relation to forecast future values and perform other functions. E- Views have been found useful in the following areas; 1. Scientific Data Analysis and evaluation 2. Financial analysis 3. Macroeconomic Forecasting 4. Sales Forecasting 5. Cost Analysis 6. Profitability Analysis and etc. E- Views is a new version of set of tools for manipulating a set of data developed especially on time series and cross section basis. E- Views have a convenient visual way to enter data series from the key board or from disk files, to create new series from existing ones, to display and print series, and to carry out statistical analysis of the relationship among series. This is made possible as it uses the visual features of Morden windows software. One can therefore use the mouse to guide the operation with standard windows, menus and dialogs. Results appear on windows and can be manipulated with standard windows techniques. Alternatively, one may use E- Views command and batch processing language. Commands can be entered and edited in the command window, one can also create and store the commands in programs that documents information for later execution. E- Views Screen Upon starting E- views the main screen will be presented, it consists of the top menu, command window, middle work area and the lower status bar; The Main Menu File: Basic file operations Edit: Basic editing operations Objects: Commands for creating and manipulating E-views objects View: Viewing options Process: Import and exporting data; sample options Quick: Shortcuts to many E- views operations Options: Set program options Window: Switch between windows Help: Online help system Note: further Details about each of the above items can be found in the help/menu items The command window The command window is the empty area with white background immediately below the main menu. This is where E- Views command is entered. The command typed, is executed immediately the enter key is pushed; this window supports cut and paste which enables the movement of text between the command window. The work area This is the area in the middle of the window where various objects are displayed. If many windows are open, they will overlap each other with the foremost window being in focus or active. A window can be moved by clicking on its title bar and dragging it to a new location. Status line This is divided into several sections. The left section will sometimes contain status messages sent by E- Views. The next section shows the default directory that E views uses to look for data and programs. The last section displays the name of the default database and work file. Help system Since it is window based software, it is user friendly. But in cases of operational problems or difficulties, the help system is always handy to provide useful assistance. To access the help, simply go to the main menu and select HELP and the help topic will appear from there one can search and digest it. The Work File To start any work in E- Views one must create or load a work file. Work file organize and contain the objects that are used in analysis. To create a new work file, use the FILE/NEW/WORKFILE command. This brings up a dialog box where you describe the type of data you will be working with. It allows you to work with time series data, as well as cross sectional data. Date formats Annual example 1999 – 2009, Quarterly example 2000:1 – 2006:4, Monthly 1990:1 – 1990:12 for weekly the week is identified by the first day of the week example 3:10:98 is March 10, 1998. And for the undated observations the start and end observations are applicable. The work file just opened is empty except for two default objects labelled c and resid these are the constant and error terms usually associated with modelling. One may wish to effect a change in the sample period by double clicking on sample command to change it. Saving Work file The work file remains untitled, it can be given title and saved either by clicking save button on the work file tool bar or by choosing File/save from the main menu as below; Importing Data E- Views can easily import excel data the data is organized in rows and columns. Before importing data a work file must have been created. The procedures for creating work file are; Step 1: Click File/New/Work file Step 2: Choose the right frequency for your data (for example annual or monthly) and impute the start date and end date and click OK Step 3: data can now be imported from an external source by clicking file/import/, and choosing the Read-Text-Lotus-Excel... Option; At this stage, the file from which you want to import data is selected and the open button is clicked as below; Entering data from the keyboard As an alternative to importing data, data can also be entered directly into a work file from the keyboard. To do so, a series object needs to be created and then data is entered using the e-views editor. The following steps are required; Step 1: File/New /Work file Step 2: Choose the start and end date Step 3: Select Objects/New objects from the main menu as below; By clicking the ENTER button the new object dialog box is displayed, then the type of object which one needs has to be selected and a title given as well. The empty series will be added to the work file as below; Step 4: To enter data into the series do the following; Double click on the GDP to open the spread sheet view (NA sequences are seen) Click the (Edit +/-) to activate the edit mode Click on the first data cell Enter the data for that cell and press ENTER. Or copy and paste from another source After entering the data press the (Edit +/-) mode to de-activate edit mode and then click the close box. Data Transformation New data sets or variables can be generated from the set of initial data sets or variables. To do this, choose GENR from the work file main menu and the dialog box open as below; The formula for generating new series/variable can be typed in the enter equation space in the dialog box and click OK for example suppose we generate the grow rate of GDP which we call ggdp, the formula is typed as ggdp = (gdp-gdp(-1)/gdp(-1)*100 and then click OK. If we want generate the logarithm of gdp as LGDP, then we type LGDP = log GDP and press OK. Statistical Computations on E- Views Statistical measures are important in data analysis and drawing conclusions. Measures such as descriptive statistics (mean, median, maximum, standard deviation, skewness and kurtosis etc) are very important in data analysis, so also measures of association such as the correlation and regression analysis are crucial in in-depth studies and monitoring/evaluation as well as impact studies. Procedure for Carrying out Statistical Analysis on E-Views The approach for doing this is very interactive using E-Views. To perform statistical analysis such as descriptive statistics (mean median, maximum, standard deviation, skewness etc) on E-Views, one needs to create a work file and enter the data as well. Graphs To represent information on a graph, first one has to generate series, open the QUICK window and select graph then one will be prompted to list the series after listing/selecting it then the OK button is pressed, from there options will be selected of the type of graph as either line scatter, pie chart etc. Descriptive Statistics To compute descriptive statistics, first one has to generate series, open the QUICK window and select SERIES STATISTICS-HISTOGRAM AND STATS then one will be prompted to list the series after listing/selecting it then the OK button is pressed, from there the descriptive statistics will be displayed; After getting the basic descriptive statistics one can obtain a wide range of parameters by clicking on VIEW in the dialog box these include but not limited to bar graph and one-way tabulation and others as below; Correlation Coefficient Correlations are computed between two or more variables to ascertain their co-variability for policy making analysis. To compute the correlation between say GDP and FDI. Go to QUICK –GROUP STATISTICS-CORRELATIONS, then a dialog box will be opened where one will be prompted to list series, groups and/or series expressions: from there the variables that are to be correlated are listed separated by space, and OK is pressed as below; It should be noted that by clicking on VIEW a combined range of measures like N-Way tabulation descriptive statistics, Chi square, Pearson coefficient and so on can be ascertained

INTRODUCTION TO ECONOMIC EVALUATION IN HEALTH CARE

INTRODUCTION TO ECONOMIC EVALUATION IN HEALTH CARE By Mustapha Muktar, PhD Department of Economics Bayero University, Kano-Nigeria mmukhtar.eco@buk.edu.ng http//:www.mustaphamuktar.blogspot.com Introduction Economic evaluation applies analytic methods to identify, measure, value, and compare the costs and outcomes of alternative interventions. Economic evaluation is a way of using the scientific approach to determine the costs and benefits of public health activities. It can also be viewed as the quantitative analysis of the relative desirability to the whole community of investing in alternative projects or programmes. It is not simple to decide on which alternatives to choose, but with evaluation decision makers can make the difficult choices when resources are limited. Economic evaluation allows us to compare the costs and outcomes of different alternatives. You can then compare programs and give recommendations on the most efficient way to use scarce resources. Process of Economic Evaluation The overall economic evaluation process is to:  identify all of the relevant costs and outcomes involved in a program  find ways to measure the appropriate outcomes and costs and assign values to them and  compare the cost per unit outcome or, in the case of cost-benefit analysis, compare the net benefits between programs. Economic evaluation therefore answers the following questions; how much does it cost to achieve a certain level of program performance?  how can a fixed budget best be allocated across program priorities?  what are the costs and benefits of choosing one program instead of another? Why use economic evaluation methods In most cases, something can be done in more than one way. For example, there may be more than one way to screen for a disease or different alternative ways to deliver a program or service. Also, you may have few resources, but many things that you need to do:  every choice you make has an associated opportunity cost.  Trade-offs must be made (for everything you choose to do, something else will not get done). To achieve a particular health objective, you may need to:  find the most effective and efficient way to deliver a program or service  spend the least possible amount to achieve the objective Justification of Economic Evaluation As early as the seventeenth century, the British physician Richard Petty advocated greater social investment in medicine. This was based on his belief that the value of a saved human life far exceeded the cost. Health care resources are limited by the total funds available, as well as through competition with other areas, such as housing and education. This raises the question of how to decide where the money should be allocated most appropriately. The establishment of a benchmark for an efficient level of health care provision is still to be found, and it must always be questioned whether the allocation of health care resources is efficient and equitable. It has been proposed that, faced with increased demands, but little increase in resources, the National Health Service has several options which include but not limited to; to become more efficient so that more individuals can be treated with the same resources; to extend means testing so that some people may be excluded from certain services due to their wealth; to increase ‘rationing’ or to provide a smaller range of services. However, there is no doubt that resources are scarce and choices have to be made regarding their use. The aim is to maximize health from available resources whilst paying due concern to issues of equity. Economic evaluation is important because without systematic analysis, it is not possible to identify the relevant alternatives. In addition, the assumed viewpoint is important. A programme that looks attractive from a patient's viewpoint may look decidedly unattractive from the government's budget. Advantages of Economic Evaluation It Compels the collection and analysis of information about programs and interventions  helps you to organize data  helps you to understand that resources are limited and that there are opportunity costs associated with making public health decisions: often, you must give up one thing to get another  Makes it possible to demonstrate to policymakers and funders the value of resources used Limitations of Economic Evaluation It Requires the assigning of values to variables that may be difficult to measure (for example, quantifying pain and suffering)  It analyzes a limited number of factors  It takes time and skill to do properly Common Methods of Economic Evaluation in Public Health Economic evaluations within public health consist of partial economic evaluations and full economic evaluations. Partial economic evaluations assess either the cost or the health outcome components of public health programs, or they assess both costs and health outcomes of a single program without reference to an alternative program. Examples: cost description, outcome description, efficacy or effectiveness evaluation, cost-outcome description, and cost analysis. Full economic evaluations assess both costs and health outcomes; they also compare these across different health interventions or compare a health intervention with a no-health intervention. Examples: cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. The choice of evaluation method is dictated by evaluation objectives, policy priorities, and data availability. The methods that constitute the category of full economic evaluations are the most comprehensive of all methods, with the partial economic evaluations serving as components of the full evaluations. In most studies, the economic evaluations draw on a variety of data types and sources, using program cost and outcome data. The basic task of evaluation efforts are therefore; to identify, to measure, to value, and to compare the costs and consequences of the alternatives being considered. Overview of Cost Analysis Economists define a cost as the value of resources used to produce a good or services. However, the way these resources are measured can differ. There are two main alternatives with respect to measurement of these resources: financial and economic costing. Financial cost represents actual expenditure on goods and services purchased. Costs are thus described in terms of how much money has been paid for the resources used in the project or services. In order to ascertain the financial costs of a project, we need to know the price and quantity of all the resources used or, alternatively, the level of expenditure on these goods and services. Economists define costs in terms of the alternative uses that have been forgone by using resources in a particular way. These economic or opportunity costs recognize the cost of using resources as these resources are then unavailable for productive use elsewhere. The basic idea is that things have a value that might not be fully captured in their prices. It is not difficult in many health programmes to identify resources inputs for which little or no money is paid: volunteers working without payment; health messages broadcasts without charge; vaccines or other suppliers donated or provided at large discount by organizations or individuals. Thus, the values of these resources to society, regardless of who pays for them, are measured by opportunity cost. Economic cost then include the estimated value of goods or services for which there were no financial transaction or when the price of a specific good did not reflect the cost of using it productivity elsewhere. The main ways that financial and economic costs differ is in the way they treat donated goods and services and other inputs. Costs can also be assessed based on costs borne by the ministry of health (like drug and equipment), by patients and their relatives (like transport and food) and by the rest of society (like health education), in monetary terms; direct costs, like wages, indirect costs (like time spent in hospital) . Costs could also be further subdivided in to average, marginal and joint costs, which help decisions on how much of a service, should be provided.There are also capital costs (investment in plant, buildings, and machinery). Costs to be Included in Evaluation If the evaluation is being made from the widest perspective the viewpoint of society as a whole then three main categories of costs must be considered: Health Service Costs, these will include staff time, medical supplies (including drugs), bed and food services in the case of inpatients, use of capital equipment, and overheads such as water, heating and lighting. These items may be divided into variable costs, which vary according to the level of activity (for example, staff time) and fixed costs, which are, incurred whatever the level of activity (for example, heating and lighting). In the long run, practically all costs become variable since those that are fixed in the short run may be varied-for example, by opening and closing wards, and by building new hospitals. In economic evaluation all such health service costs-both fixed and variable-are referred to as direct costs. Costs Borne By Patients and Their Families; These will include out of pocket expenses such as travel, and any cost resulting from caring activities undertaken by the family. These are also direct cost items. In addition, there may also be indirect costs (productivity costs) such as income lost because of absence from work (which is a production loss to society) and any psychological stress experienced by patients, or their families or both. External Costs: These occur when people not directly involved in a programme experience increased costs because of it. For example, public health legislation enforcing antipollution standards or specifying water purification levels may lead to increase in manufacturing costs and consumer prices (as well as providing health benefits). Valuation of Costs The costs identified in physical units (such as hours of staff time, hours of operating theatre use, quantities of drugs and so on) must be valued in monetary terms. For most direct cost items market prices will be available. Consultation time can therefore be valued at the appropriate hourly rate; Medical and surgical supplies can be valued at the prices charged by suppliers; Indirect costs, for which there are no market prices, pose a more difficult problem of evaluation. Some method has to be used to impute values to them. This is known as “shadow pricing”, and time costs provide a good example. When time is spent in hospital by a patient, or on caring by a relative, and this displaces work time, it is usual practice to use the relevant wage to value the lost time.