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Using PDA consistency checks to increase the precision of profits and sales measurement in panels

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  • Fafchamps, Marcel
  • McKenzie, David
  • Quinn, Simon
  • Woodruff, Christopher

Abstract

Personalized Digital Assistants (PDAs) and other forms of hardware needed to collect survey data electronically have become more affordable and powerful in recent years, leading to their use in a number of surveys in developing countries. Simple use of these devices can offer the prospect of more timely data entry and greater accuracy in guiding respondents through skip patterns. Further benefits are possible through the use of more complex consistency checks. We use PDAs to measure sales and profits for microenterprises, which are notoriously noisy. Consistency checks in the cross-section compare sales and profits, while those in the panel query responses which result in large changes from one period to the next. Cross-sectional checks also served as a second prompt in the case of missing profits. These checks do succeed in reducing the standard deviation and in increasing the correlation of the observations for which corrections are made. However, we find that the vast majority of large changes in enterprise sales and profits are confirmed by firm owners as genuine, highlighting the volatility of income in this sector. As a result, the overall impact of these consistency checks on the full sample is rather limited, suggesting that while such checks are useful if computerized forms of data collection are being used, the consistency checks per se are not a strong reason for using computerized data collection in collecting firm profits and sales.

Suggested Citation

  • Fafchamps, Marcel & McKenzie, David & Quinn, Simon & Woodruff, Christopher, 2012. "Using PDA consistency checks to increase the precision of profits and sales measurement in panels," Journal of Development Economics, Elsevier, vol. 98(1), pages 51-57.
  • Handle: RePEc:eee:deveco:v:98:y:2012:i:1:p:51-57
    DOI: 10.1016/j.jdeveco.2010.06.004
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    References listed on IDEAS

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    1. de Mel, Suresh & McKenzie, David J. & Woodruff, Christopher, 2009. "Measuring microenterprise profits: Must we ask how the sausage is made?," Journal of Development Economics, Elsevier, vol. 88(1), pages 19-31, January.
    2. John Gibson & David McKenzie, 2007. "Using Global Positioning Systems in Household Surveys for Better Economics and Better Policy," World Bank Research Observer, World Bank Group, vol. 22(2), pages 217-241, September.
    3. David McKenzie & Christopher Woodruff, 2008. "Experimental Evidence on Returns to Capital and Access to Finance in Mexico," World Bank Economic Review, World Bank Group, vol. 22(3), pages 457-482, November.
    4. Gibson, John & McKenzie, David, 2007. "Using the global positioning system in household surveys for better economics and better policy," Policy Research Working Paper Series 4195, The World Bank.
    5. John Gibson & David McKenzie, 2007. "Using the Global Positioning System (GPS) in Household Surveys For Better Economics and Better Policy," Working Papers in Economics 07/04, University of Waikato.
    6. Pascaline Dupas & Jonathan Robinson, 2013. "Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 163-192, January.
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    Citations

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    Cited by:

    1. David McKenzie & Christopher Woodruff, 2014. "What Are We Learning from Business Training and Entrepreneurship Evaluations around the Developing World?," World Bank Research Observer, World Bank Group, vol. 29(1), pages 48-82.
    2. Karlan, Dean & Knight, Ryan & Udry, Christopher, 2015. "Consulting and capital experiments with microenterprise tailors in Ghana," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 281-302.
    3. Marcel Fafchamps & Simon Quinn, 2017. "Aspire," Journal of Development Studies, Taylor & Francis Journals, vol. 53(10), pages 1615-1633, October.
    4. Caeyers, Bet & Chalmers, Neil & De Weerdt, Joachim, 2012. "Improving consumption measurement and other survey data through CAPI: Evidence from a randomized experiment," Journal of Development Economics, Elsevier, vol. 98(1), pages 19-33.
    5. repec:eee:deveng:v:1:y:2016:i:c:p:4-11 is not listed on IDEAS
    6. de Mel, Suresh & Herath, Dammika & McKenzie, David & Pathak, Yuvraj, 2016. "Radio frequency (un)identification: Results from a proof-of-concept trial of the use of RFID technology to measure microenterprise turnover in Sri Lanka," Development Engineering, Elsevier, vol. 1(C), pages 4-11.
    7. Francisco J. Buera & Joseph P. Kaboski & Yongseok Shin, 2012. "The Macroeconomics of Microfinance," NBER Working Papers 17905, National Bureau of Economic Research, Inc.
    8. McKenzie, David, 2012. "Beyond baseline and follow-up: The case for more T in experiments," Journal of Development Economics, Elsevier, vol. 99(2), pages 210-221.
    9. Falco, Paolo, 2014. "Does risk matter for occupational choices? Experimental evidence from an African labour market," Labour Economics, Elsevier, vol. 28(C), pages 96-109.
    10. Groh, Matthew & McKenzie, David, 2016. "Macroinsurance for microenterprises: A randomized experiment in post-revolution Egypt," Journal of Development Economics, Elsevier, vol. 118(C), pages 13-25.
    11. Fafchamps, Marcel & McKenzie, David & Quinn, Simon & Woodruff, Christopher, 2014. "Microenterprise growth and the flypaper effect: Evidence from a randomized experiment in Ghana," Journal of Development Economics, Elsevier, vol. 106(C), pages 211-226.
    12. McKenzie, David, 2011. "How can we learn whether firm policies are working in africa ? challenges (and solutions?) for experiments and structural models," Policy Research Working Paper Series 5632, The World Bank.

    More about this item

    Keywords

    Microenterprises; Measurement; Profits; Panel; Survey methods; Electronic data collection;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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