Chapter 3

Research Methodology

3.1. Research Design

As per Webster’s Dictionary, Design is that blueprint which provides a scaffold for
the research which helps us to decide about our research approach and the steps
involved in the process of meeting our objectives. It provides us the base to gather
the related evidence with less expense of time, effort and capital.

Approach of Study
A mixed approach of quantitative as well as qualitative research is used in the present
study. Quantitative research involves figures and data in which to quantify the
problem, we systematically collect and analyze the data by using appropriate statistics
whereas qualitative method is exploratory and deals with uncovering the qualitative
words, meanings, ideas and experiences which can be observed but not measured. Our
objective in this investigation, was to assess the impact of covid 19 on global as well
as Indian economy using statistical tools which results in making generalization from
a larger population. The objectives of impact of covid on global economy and Indian
economy have been achieved using quantitative data which was precise, reliable and
consistent. Additionally, since the objective of the present study focused on impact on
various parameters which can’t be quantified, qualitative approach was also used.

3.2. Research Methodology

This chapter discusses the research design of the present thesis. The present study has
used secondary data to achieve its objectives. Secondary data is defined as the data
which has been already published or compiled by someone else. The study period,
data and methodology is different for different objectives which is as per the
requirement of the objectives. So, in this work the research design for each objective
has been mentioned:
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3.3. Objective 1: To measure the spread of covid 19 cases in different economies of

the world

World Bank has categorized 217 economies of the globe into four income groups.
They are low, lower-middle, upper-middle, and high-income countries. This grouping
is reorganized every year in July and is done on the basis of GNI per capita in the
current USD of the previous year (i.e. 2020 in this case).

Hypotheses: To achieve the objective, the main hypothesis framed is:

H1: There is a significant difference in the number of COVID cases among different
economies of world.

Further, to measure this pair-wise difference following sub-hypothesis has been

framed:

H1a: The number of COVID cases between HI and UMI countries is significantly
different

H1b: The number of COVID cases between HI and LMI countries is significantly
different

H1c: The number of COVID cases between HI and LI countries is significantly

different

H1d: The number of COVID cases between UMI and LMI countries is significantly
different

H1e: The number of COVID cases between UMI and LI countries is significantly
different

H1f: The number of COVID cases between LMI and LI countries is significantly
different

Here HI is high-income, UMI is upper-middle-income, LMI is lower-middle-income

and LI is lower-income.

Study period: The study period considered is from 22 nd January 2020 to 30th Nov
2021. Daily data has been considered for the said duration.

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Data
The study has used secondary data published on the official website of World Bank
related to the high income, upper-middle income and lower-middle income and low-
income group

Research Method
The analysis aims to examine the difference in the number of COVID cases as per the
economies classified as-high income, upper-middle income and lower-middle income
and low-income group by the World Bank. To achieve this ANOVA has been applied
and further to test for the particular group where this difference lies (multiple
comparisons), post-hoc analysis was conducted.
The tests for multiple comparisons will be selected as per the results of ANOVA. The
most common tests used when equal variances not assumed are:

Games-Howell
The statisticians suggest to use Games –Howell (GH) method while using large
sample size. GH method is believed to perform best for pair wise comparisons. It is
considered to be liberal when sample sizes are small and hence recommended when
sample sizes is large enough (Toothaker, 1991). If the omnibus null is true, then all
pairs must be equal. Conversely, if any pairs are not equal, the omnibus null must be
false (Games &Howell, 1976).

Tamhane T2
Tamhane T2 is a method that is applied to measure pairwise differences. This method
points that the Games-Howell method may be somewhat generous and hence
Tamhane advocated a technique known as Tamhane T2 method. This method is based
on t-distribution and it uses Sidak test to agree the alpha level and Welch procedure to
define degrees of freedom.

3.4 Objective 2: To analyze the impact of COVID-19 on global economy

This objective has been achieved by analyzing various published articles, journal
papers and official websites of different governments. As the motive here is to see the
impact of covid on global economy, the macroeconomic, microeconomic, the positive
and negative both have been selected.

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Macroeconomic Impacts
The general impact on global business and society has been discussed in this section.

Microeconomic Impacts
The specific impacts on a particular sector/area/economy have been discussed in this
part.

The Negative Impacts

This section mainly included:
i) Negative macroeconomic impact of COVID-19
ii) Impact of COVID-19 on global supply chain and international trade
iii) Impact of COVID-19 on the tourism and travel (aviation) sector
iv) Impact of COVID-19 on sustainable development goals

The positive impact of COVID-19: This section focuses on:

i) Improvements in air quality

ii) Reduction in environmental noise
iii) Increased cleanliness of beaches
iv) Decline in primary energy use
v) Record low CO2 emissions
vi) Renewables rise
vii) Boost in digitalization

3.5. Objective 3: To analyze the impact of trade and consumption on Indian

economy during COVID-19.

This objective aims to analyze if any change has come into the underlying
relationship between trade, consumption and Gross Domestic Product (GDP) of India
due to covid-19. This is important from the perspective that this pandemic has brought
a lot of change in the consumption pattern of the natives of any country. The reason
can be attributed to locked economy, job loss, salary cut or illness. Similarly, the
closure of international and domestic boundaries of the nation has severely affected
the trade of the country. International trade and domestic consumption, both make an

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important part of the GDP of any country but due to above mentioned reasons the
equation might have changed. The following definitions and variables have been used
to measure the economy, trade and consumption:

Gross Domestic Product (GDP)

IMF defines GDP is used to measure the monetary value of final goods and services
of any economy in a particular time period (quarter or year). It considers all output
produced within the boundaries of a country. GDP comprises of goods and services
made for selling in the market and includes some non-market manufacture, such as
defense or education services provided by the government.

Trade
Net trade has been used as proxy for trade. Net trade adjusts imports with exports. If
net trade is positive, it means country’s export is more than import and vice versa.

Consumption
Private Final Consumption Expenditure in India has been used to measure the
consumption in India. It is believed to have a positive association with growth of
economy. The consumption directly relates to purchasing power of the country and
hence contributes to GDP.
Table 3.1. Variables

Study Period
The present objective has been accomplished using the data for a period of 2000- to
2021. The reason for selecting this time frame is the change in millennium. It also
covers up several other events which might have changed the equation.

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Data and Sample

The data for present study consists of the quarterly data on net trade, real gross
domestic product and private consumption for the period 2000-2021.

Source of Data
The data for the study has been taken from Federal Reserve Bank of St. Louis.

Research Method
The objective of measuring the impact has been accomplished by using linear
regression analysis. Further to check the impact of covid 19 multiple structural break
point test has been used. The two methods are described below”
1) Regression analysis: Regression analysis is used to evaluate associations between
a dependent variable and one or more independent variables. It also measures
the strength of the relationship among variables and for modeling the future
relationship between them. The general form of linear regression analysis is:

𝑌 = 𝛼 + 𝛽1 𝑋1 + 𝛽2 𝑋2 … … + 𝑒
Here Y is a dependent variable and X1 and X2 are independent variables. Alpha is the
intercept and beta is the slope coefficient which gives the value for per unit change. e
is the error term or residual. If the variables are first order integrated or in other words
are stationary at first difference form the model becomes:

𝑌(𝑡−1) = 𝛼 + 𝛽1 𝑋1(𝑡−1) + 𝛽2 𝑋2(𝑡−1) … … + 𝑒(𝑡−1)

In present study the variables are stationary at first difference so the model becomes:

𝐺𝐷𝑃(𝑡−1) = 𝛼 + 𝛽1 𝑇𝑟𝑎𝑑𝑒(𝑡−1) + 𝛽2 𝐶𝑜𝑛𝑠(𝑡−1) + 𝑒(𝑡−1)

Where GDP stands for gross domestic product, trade stands for net trade and cons
shows Private consumption.

To apply linear regression, certain assumptions need to be followed: They are:

1. There should be a linear relationship between the dependent and independent

variables.
2. The independent variables are not arbitrary/random.

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3. The residual (error) term should be zero and constant across all observations.
4. The residual (error) should not correlated across all observations and follow
the normal distribution.

Normal Distribution
Normal distribution, or Gaussian distribution, is a probability distribution which is
symmetric about the mean. It indicates that data near to mean occur more frequently
than data far from the mean. The error term should follow a normal distribution
making a bell shaped curve. In this objective, the Jarque-Bera test has been used to
check normality

Structural Break
The sudden change in any relationship over a period of time among the economic
variables is a normal occurrence due to countless political and economic factors.
Quandt (1958) and Chow (1960) considered structural change tests but for an
identifiable single break date. However, it is not easy to identify this date accurately
due to a number of events occurring in any economy. Quandt (1960) extended the
Chow test and proposed to take the largest Chow statistic over all possible break
dates. In the same context, Andrews (1993) and Andrews and Ploberger (1994)
considered a comprehensive examination of the problem of testing for structural
change.. The present study has considered multiple structural breakpoint test
developed by Bai and Perron (2003) as it gives information on the break in structure
at known point of time. It

3.6 Objective 4: To suggest an integrated framework to combat COVID-19

pandemic

This objective has been accomplished by using the secondary data. It has utilized
various published articles, journal papers and news. The compilation of various
information gathered has been used to present an integrated framework consisting of
social, economic and technological interventions required to combat the pandemic of
covid-19.The study period covered comprised of January 2020 to November 2021.
The behavior of people, the management of government and the medical techniques

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developed in this period has been considered for developing the framework. The
social behavior considered is:

 Covering face with face mask.

 Social Distancing of 6 feet.
 Avoidance of gathering (more than 5 persons at one place).
 No Spitting.
 Provisions of Thermal Scanning at places like offices and shops.
 Frequent hand wash and use of sanitizers to disinfect.

The economic interventions considered are:

 Bailout Packages for Industrial and Economic activities

 Develop effective Healthcare Infrastructure viz, Corona Dedicated Hospitals,
increase of No. of beds for COVID 19 confirmed, testing kits, etc.
 For developing Corona Positive’s Testing and Monitoring infrastructure

Some of the technological interventions considered are:

 Artificial Intelligence framework with cell-phone based surveys like-‘Arogya-

Setu’ App.
 Internet of Things has been proved as an effective tool to collect and analyze
medical & laboratory data to take better decisions.
 Digital health ranges from AI (using deep learning), IoT, e-health, and Tele-
health to the analysis and effective use of big-data.
 Artificial Intelligence deep learning systems to recognize health-related trends,
model – risk linkage and forecast outcomes helped to develop ‘smart labs’.
 Contact tracing, testing, and self or institutional isolation.
 Snood mask with an antiviral coating, low-cost high-tech ventilators
 COVID-Net, a Deep CNN (convolutional neural network) design is generated
to predict COVID 19 contagion from CXR (Chest X-Ray) images
 Alternative technology RDT (Rapid Diagnostic Test) is used.
 Convalescent plasma therapy

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